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Corporation Tax

Volume 450: debated on Wednesday 11 October 2006

To ask the Chancellor of the Exchequer pursuant to the answer of 13 July 2006, Official Report, column 2106W, on corporation tax, what annual mean average amount of additional tax is expected to be paid as a consequence of the removal of the zero per cent. starting rate of corporation tax by (a) the 720,000 companies expected to be affected by the change and (b) the 870,000 companies which make less than £10,000 annual profit. (86688)

The 19 per cent. non-corporate distribution rate and the 0 per cent. starting rate of corporation tax have been replaced by a new single banding for small company profits, set at the current small companies’ rate of 19 per cent.

For 2006-07 the mean average annual amount of additional tax expected to be paid following this change is:

(a) £690 (median £475) by 720,000 companies affected;

(b) £665 (median £450) by the 370,000 companies within this total which make annual profits up to £10,000.