Corporation tax rates and bands are as follows:-

Financial year to              31 March 2010                           31 March 2009

Taxable profits

First £300,000                21%                                                    21%
Next £1,200,000            29.75%                                            29.75%
Over £1,500,000            28%                                                   28%

Trading losses

Trade loss carry back will be extended to a period of three years, with losses being carried back against later years first.  After carry back to the preceding year, a maximum of £50,000 of unused losses will be available for carry back to the earlier two years. This will apply to trading losses made by companies in accounting periods ending between 24 November 2008 and 23 November 2010 and to trading losses made by unincorporated businesses in tax years 2008/09 and 2009/10.  The £50,000 limit applies separately to the unused losses of each 12 month period or tax year.

Capital allowances

A 40% first year allowance will be introduced for expenditure on qualifying plant and machinery that would normally be allocated to the main capital allowance pool. This will be
available to businesses incurring such expenditure in the 12 month period beginning on 1 April 2009 for corporation tax and on 6 April 2009 for income tax.
Qualifying expenditure incurred on cars on or after 1 or 6 April 2009 will now be allocated to one of the two general plant and machinery pools. Cars with CO2 emissions exceeding 160 g/km will be dealt with in the special rate pool and attract writing down allowances (WDA) at 10%. Cars with CO2 emissions of 160 g/km or less will be added to the main rate pool and attract WDA at 20%. Expenditure incurred before April 2009 will continue to be subject to the old ‘expensive’ car rules for a transitional period of around five years. Cars that have an element of non-business use will continue to be dealt with in single asset pools to enable the private use adjustment to be made, but the rate of WDA will be determined by the car’s CO2 emissions.

Car leases

From April 2009, the rules restricting the amount of car lease rental payments that can be deducted for tax purposes will be changed to a flat rate disallowance of 15% of relevant payments.  This will apply only in respect of cars with CO2 emissions exceeding 160 g/km.  For leases that commenced prior to April 2009, the previous rules will continue to apply until the end of the lease.

‘The avoidance of taxes is the only pursuit that still carries any reward’.
John Maynard Keynes, British economist