Corporation tax increase no longer going ahead in 2023
What were the changes?
In the March 2021 Budget, Rishi Sunak announced that the rate of corporation tax would increase to 25% from 1 April 2023 where a company’s profits exceeded £250,000 a year, with the current 19% rate continuing to apply where profits were no more than £50,000 a year. There was also scheduled to be an effective 26.5% rate on profits between £50,000 and £250,000 a year.
In the March 2021 Budget, Rishi Sunak announced that the corporation tax rate would increase to 25% from 1 April 2023 where a company’s profits exceeded £250,000 a year, with the current 19% rate continuing to apply where profits were no more than £50,000 a year. There was also scheduled to be an effective 26.5% rate on profits between £50,000 and £250,000 a year.
The UK would still have had a very competitive rate compared to other major trading countries as many of those are also increasing corporate tax rates.
What will the changes to the corporation tax rate be in 2023?
Nevertheless, the planned increase will not now go ahead in line with the promises made by Liz Truss in her campaign to be Conservative Party leader and Prime Minister.
Chancellor Kwasi Kwarteng confirmed that the UK corporation tax rate will stay at 19% for the foreseeable future. It is hoped that the decision will encourage investment into the UK to stimulate economic growth.
All companies currently paying corporation tax at 19% will continue to do so.
You can find the growth plan here.
Do you need further guidance on the new corporation tax rate? We offer a wide range of services which are unique to your business. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.
Our fantastic team at A&C Chartered Accountants are here to help.