The main rate of corporation tax is set to reduce from 19% to 17% from 1 April 2020.
At the same time the availability of the 100% annual investment allowance on capital expenditure will also increase from £200,000 to £1 million from 1 January 2019 until 31 December 2020 on all qualifying expenditure.
As a result, there are therefore opportunities to make permanent tax savings by accelerating planned capital expenditure into earlier periods, subject to consideration of transitional rules for chargeable periods spanning these dates.
Taxable profits may also be reduced by eligible employer pension contributions. Given the reduction in rate of corporation tax from 1 April 2020, it may also be worth considering making contributions earlier rather than later to maximise the corporation tax relief available and therefore minimise the overall cost to the business.
If you would like to discuss, please contact our Corporate Tax teams on either Rugby 01788 539000 or Leicester 0116 261 0061.