On the 6th of April 2011 the new tax year started and will run through to 5th of April 2012. For the purpose of corporation tax and government financial statements, the year will start on April the 1st 2011 and run through to March 31st 2012. In this article we look at how businesses will be affected by the fiscal year ahead, as the coalition government’s plans from the July 2010 budget come in to place, and the March 2011 budget is announced.

Some of the main legislative changes most likely to have an impact on your business or working life in the new tax year include:

• Corporation tax will rate will drop from 28% to 26% (the full rate); 1% lower than expected pre-budget.

• The small companies’ rate falls from 21% to 20%.

• From the first of April, all Corporation Tax returns and payments must be made online.

• Eligible partners of those either due to give birth or adopt a child will gain the right to additional paternity leave and pay.

• The right to request flexible working will be extended to parents of children under 18.

• A new 5% rate of Stamp Duty will be introduced for residential properties sold for more than £1 million.

In addition, the tax-free earnings allowance (or personal allowance) will be raised by £1,000 from £6,475 to £7,475 per annum. N.I is also in the process of change, with the threshold at which employers start to pay national insurance being raised at the beginning of April; making it cheaper for companies to employ new staff at lower salary levels. Unfortunately the increase in the rate of National Insurance from 12.8% to 13.8% will mean generally a higher tax bill for employers.

There are still a range of measures for small businesses to look out for in the near future in order to help their growth, which include:

• An exemption, for start-up businesses and all businesses employing fewer than ten people, from new domestic regulation for the next three years.

• An increase in the rate of Research and Development tax relief to 200 per cent in 2011 and 225 per cent in 2012 for small and medium-sized companies.

• An extension of the business rates holiday for small businesses until October 2012.

• A confirmed agreement with banks of a 15 per cent increase in the availability of credit to small businesses.

There are also measures to help aimed at helping young people find their way into work. There will be 80,000 additional work experience placements for young people over the next two years, up to 50,000 more apprenticeship places for young unemployed people over the next four years, improved technical and vocational education and an expansion in the amount of university technical colleges. All these changes are aimed at helping companies train and source the best talent for future benefit of our economy.

But there are wider benefits to the economy of these investments too; they will ultimately help the growth of our economy and support businesses in the future.

It’s worth looking at the changes in detail to see for yourself how much of a difference the new budget will make for your business, or if you are looking to start up a new business, look at the challenges ahead before embarking on the company registration process.