Today saw the first budget for some years which did not feature a new cut in the corporation tax rate. Instead, the previous cuts (to 21% for the year beginning 1 April 2014 and to 20% for the year beginning 1 April 2015) were reaffirmed and so it seems clear that the government intends to stabilise the corporation tax rate at 20%.
The new announcement likely to be of some interest to business is that of two extensions to the capital allowances regime. First, the annual investment allowance has been doubled from £250,000 to £500,000 for plant and machinery expenditure incurred during the period 1 April 2014 (corporation tax) / 6 April 2014 (income tax) to 31 December 2015. Secondly, the availability of enhanced capital allowances for expenditure on qualifying plant and machinery for use in enterprise zones has been extended to 31 March 2020. These extensions are surprisingly generous and businesses will need to consider carefully the timing of their future plant and machinery expenditure in the light of this announcement.