The UK has announced further amendments to the main corporate tax rate -- the rate applicable from April 1, 2012 to March 31, 2013 will be reduced from 25% to 24% and a further rate reduction to 23% will be applicable from April 1, 2013. The timing of Substantive Enactment (the required threshold for accounting under IFRS) is March 26, 2012 for the reduction to 24% and upon passage of the third reading of Finance Bill 2012 for the reduction to 23% (which is expected in June or July 2012). Enactment (the required threshold for accounting under US GAAP) for both changes will take place upon Royal Assent of Finance Bill 2012 as Finance Act 2012; this is expected to be in July 2012, but may be delayed until October 2012. The last in the UK's series of tax rate changes which is expected to be enacted next year would now lower the main corporate tax rate to 22% by April 1, 2014.
This issue of Tax accounting insights discusses why multinational groups with UK entities are encouraged to assess the tax accounting implications of these tax rate changes.