Company tax perspectives

Article Abstract:

The effect of the United Kingdom's Finance Act on corporate tax rates and tax planning is discussed. Corporate tax rates range from 27 to 35 percent, depending on company size. Reductions have been balanced by the elimination of stock relief and reductions in capital allowances. After March 16, 1987, chargeable gains will be taxed at the regular corporate tax rate, which will mean an effective five percent increase for companies with large profits, and a three percent reduction for companies with small profits. Multinational corporations will no longer be able to report losses in more than one jurisdiction. The Finance Act changes corporate filing and payment provisions. The payment period has been standardized to nine months. Tax returns must be filed within 12 months of the end of the tax year.

Finance, Tax planning, Business enterprises

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A budget aimed at business

Article Abstract:

The 1987 British national budget will make several changes in business taxation, specifically in the areas of corporation tax, value-added taxes (VAT) on small businesses, pensions and profit-related pay, and small business income and capital taxes. The main corporate tax rate remains at 35 percent, but is reduced to 27 percent for small companies. As of Oct 1987, businesses do not have to account for VAT until paid by customers, and may not reclaim until suppliers are paid. A new scheme for filing VAT returns will be introduced in summer 1988 which will allow businesses to pay their VAT liability in 10 monthly direct debit payments under certain circumstances. Tax relief has been given for personal pensions and for qualifying profit-related pay schemes.

Budget, Budgeting, Budgets

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Feeling charitable?

Article Abstract:

The British Finance Act of 1986 provides additional relief to individual and corporate donations to charity and is aimed at preventing exploitation of the tax exemptions available to charities. The new rules cover areas concerning relevant income and qualifying expenditures, nonqualifying investments and loans, restrictions and their effects, relief for covenant payments, donations by companies, payments between charities, and payroll deductions for charitable contributions.

Laws, regulations and rules, Scotland, Charitable trusts, Charitable contributions, Charitable donations

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