The Business Exchange Swindon & Wiltshire Edition 41: Feb/March 2019 | Page 10
FINANCE
A recent history of Corporation
Tax rates for small companies
AMS Accountancy’s Peter
Bromiley looks at how tax rates
have changed in the last 12 years.
In recent years, for small companies
the Corporation Tax Rate has effectively
increased from 20% to 25.07% (small UK
business had a 6% rise in tax on profits -
including dividend tax).
Whereas, from 2006/07 to 2017/18,
the main Corporation Tax Rate (for more
profitable companies) was reduced from
30% to 19% (so for institutional shareholders
or foreign owners there has been an 11%
drop in the tax rate).
In the last 12 years or so, large companies
have benefitted massively from tax cuts.
In contrast, small company owners have
recently been hammered by the dividend
tax. It does seem to be the case that recent
Chancellors have been very favourable to
big business - but less helpful to small UK
businesses!
Here is a table detailing the changes from
2006-2018.
Tax year Main
rate
Small companies rate
(incl. dividend tax from
2016/17)
2006/07 30% 19%
2007/08 30% 20%
2008/09-
2010/11 28% 21%
2011/12 26% 20%
2012/13 24% 20%
2013/14 23% 20%
2014/15 21% 20%
2015/16 20% 20%
2016/17 20% 20% + 6%
dividend tax = 26%
2017/18 19% 19% + 6.07%
dividend tax = 25.07%
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What does the ‘Personal Tax Allowance’ mean?
Every person who is resident in the UK is given a personal
allowance each tax year. It operates as follows:
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The personal allowance is the amount of income you can receive
before paying tax – and it generally increases each tax year. For
the 2018/19 tax year, it is £11,850. So, if you earn £20,000 in
2018/19, you will be subject to income tax on £8,150 of your
earnings.
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that drives your business. Basepoint Business Centres share
this enthusiasm and are committed to helping businesses
by offering first-class workspaces alongside services that
support you in making your business a success.
The personal allowance is reduced when your income exceeds
£100,000 in a tax year (by £1 for every £2 your income exceeds
£100,000) – so that when your income reaches £123,700 (in
2018/19), you will no longer receive a personal allowance.
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10
THE BUSINESS EXCHANGE 2019
basepoint.co.uk
@AMSAccountancy
www.ams-accountancy.co.uk