1.Section 5 reduces the corporation tax (CT) main rate for profits other than ring fence profits for the financial year beginning 1 April 2012. It sets the main rate of CT at 24 per cent on non-ring fence profits effective from 1 April 2012.
2.Subsections (1) and (2) substitute the corporation tax main rate of 25 per cent set in Finance Act 2011 with a rate of 24 per cent for the main rate of CT on non ring fence profits for the financial year 2012, with effect on and after 1 April 2012.
3.The main rate of CT is paid by companies with profits of more than £1,500,000 (the upper profits limit).
4.Where two or more companies are associated with one another, the profits limit is reduced. This is done by dividing the limit by the number of associated companies.
5.Profits from oil extraction and oil rights in the UK and the UK Continental Shelf (“ring fence profits”) will continue to be subject to a separate main rate of CT applicable to those ring fenced profits. Profits from activities which are not ring fenced will continue to be charged at the main rate of CT applicable to all other profits.