Corporation Tax Changes and Marginal Rate Planning

Published 6th July 2021

From 1 April 2023, the main rate of Corporation Tax will increase from 19% to 25%.

The legislation will also introduce a small profits rate and will set this at 19%.

The small profits rate will apply to profits below the lower limit of £50,000, profits exceeding the upper limit of £250,000 will be charged at the main rate. 

The marginal rate of tax will therefore be 26.5% for profits between £50,000 and £250,000

The above limits are reduced where there are multiple Companies ie in a group situation.

Contact us to discuss the planning opportunities prior to your year-end to minimise any corporation tax liabilities at the marginal rate of 26.5%.

 

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