By Jonathan Davies
As the UK enters a new financial year, a number of tax changes take effect today (Wednesday 1 April), including Corporation Tax, Diverted Profits Tax and Air Passenger Duty.
Corporation Tax
Corporation Tax on company profits will be cut from 21% to 20% today. The move means that the UK has the joint-lowest corporation tax in the G20. Germany and France's equivalent taxes stand at 30% and 33%, respectively.
Businesses will now pay the same rate of tax on profits over £300,000, whether large or small.
More than 100 business leaders signed a letter backing the Conservatives ahead of the general election, and praised the cuts to corporation tax.
Meanwhile, the Labour party has pledged to reverse the cuts of this government and to return corporation tax to 28%.
Diverted Profits Tax
Following the public frustration and anger surrounding huge multinational companies like Amazon, Apple, Google and Starbucks, the government has introduced the Diverted Profits Tax - the so-called 'Google Tax'.
It means that any company that operates in the UK, but artificially diverts its profits to another country will pay Diverted Profits Tax - 25% of profits.
It its expected to generate £25 million for the Treasury this year, rising to £355m by 2020.
Air Passenger Duty
The changes will make it cheaper for passengers on long-haul flights of 4,000 miles or more. However, flights of 2,000 - 4,000 miles will pay a slightly higher tax.
The two more expensive bands of Air Passenger Duty are being scrapped altogether, and brought into line with the second most expensive. Higher levies for flights between 4,000 and 6,000 miles, and flights more than 6,000 miles have been scrapped.
Instead, all flights over 2,000 miles will carry a £71 tax. That means a £14 cut for flights over 4,000 miles and a £26 cut for over 6,000 miles.
But Air Passenger Duty on 2,000 - 4,000 mile flights rise £2 to £71.
Further changes come into effect on 1 May, when under 12s will no longer be taxed and under 16s will not be charged from March 2016.
