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.
Need more information?
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