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Budget 2016: The proposals in detail – to Corporation Tax/changes to loss relief/changes to the Corporation tax rate

There will be fundamental changes to the rules for setting off corporate tax losses starting on 1 April 2017.

For losses incurred on or after 1 April 2017, companies will be able to use carried forward losses against profits from other income streams or from other companies within a group.

However, large companies with profits in excess of £5m will only be allowed to offset brought forward losses against 50% of the amount of profit in each future period. 

The proposals in detail –to Corporation Tax –changes to the Corporation tax rate

A single corporation tax rate of 20% has applied since 1 April 2015 regardless of the level of the company’s profits.

In the summer 2015 Budget it was announced that this would reduce to 19% in April 2017.

The Chancellor has now announced that this will now be reduced to 17% from 1 April 2020.

Andy Scott


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