Back in Spring 2021, the Chancellor announced in his budget that Corporation Tax will raise for companies with profits over fifty thousand pounds as well as changes to how the higher rate of Corporation Tax works.
From April 2023, companies creating profits of £250,000 or more will see an increase to 25% for Corporation Tax from the current 19%. Whereas, companies with profits between £50,000 to £250,000 will recover marginal relief from the 25% tax margin.
The marginal relief fraction is set at 3/200. The amount of marginal relief for the boundary can be worked out by finding the difference between the company’s profit and £250,000 (upper-profit limit) and multiplying it by the fraction.
Companies with profits under £50,000 will continue to pay Corporation Tax at 19%. The new Corporation Tax groups have adjusted for companies with accounting periods shorter than twelve months.
For more in-depth information on changes to Corporation Tax and how it will affect your business, go to the Government’s page on Corporation Tax.
For help staying on time with your tax returns, or for general advice to help your business be as tax efficient as possible, get in touch with us at email@example.com