The main rate of corporation tax

Corporation tax has been at 19% for all sizes of companies since 2017 and, contrary to prior government announcements, remains at 19% for the current year from 1st April 2020.

Annual investment allowance

The annual investment allowance (‘AIA’) allows 100% capital allowances on qualifying assets in the year of addition up to an annual limit. The AIA was temporarily increased to £1m between 1st January 2019 and 31st December 2020. Care needs to be taken with year ends other than 31st December, as different rates may apply for different parts of your financial year, and rules for apportioning spending between periods can be complex.

Living wage

The National Living Wage (for workers over the age of 24) is £8.72 from 1st April 2020.
Since 6 April 2014 employers have been able to make a claim to reduce their secondary class 1 NIC bill. This is the Annual Employment Allowance, which, from 6th April 2020, is £4,000.

Taxation of dividends for individuals

From April 2016 the Government introduced a new Dividend Allowance. This was reduced from £5,000 per annum to £2,000 from 6th April 2018, and remains at that level for the tax year starting from 6th April 2020.
Amounts received by an individual above this allowance will be subject to personal tax at 7.5% for basic rate taxpayers, 32.5% for higher rate taxpayers and 38.1% for additional rate taxpayers.
If you have any tax questions please do not hesitate to get in touch with us.