Smaller companies see fall in corporation tax

Effective from 1 April 2002, the corporation tax rate for smaller companies on profits up to £300,000 have been reduced from 20% to 19%. The starting rate of corporation tax has also been reduced from 10% to 0% on the first £10,000 of profits but phased out as profits rise to £50,000. These reforms mean that all companies with taxable profits of less than £10,000 will pay no corporation tax. Small tax paying companies will save a maximum of £3000 and average of £700 every year.