Budget 2021: Corporation tax set to rise to 25% from April 2023
03 March 2021
Corporation Tax is a tax charged to all limited companies which is payable against the profits a company makes. In the UK, corporation tax is charged at 19%, which is the lowest rate when compared with all the G7 countries.
The chancellor announced that from 2023, the rates will increase to 25% and stated that this will only affect 10% of companies, who will be required to pay at this increased rate.
The Chancellor said:
"This new higher rate won’t take effect until April 2023, well after the point when the OBR expect the economy to have recovered.
And even then, because corporation tax is only charged on profits, any struggling businesses will, by definition, be unaffected.
Second, I’m protecting small businesses with profits of £50,000 or less, by creating a Small Profits Rate, maintained at the current rate of 19 percent.
“This means around 70 percent of companies – 1.4 million businesses - will be completely unaffected.
And third, we will introduce a taper above £50,000, so that only businesses with profits of £250,000 or greater will be taxed at the full 25 percent rate."
The Budget document can be accessed in full here.
Information provided in this news article may be subject to change. Please make note of the date of publication to ensure that you are viewing up to date information. Download the CIPP's Payroll: Need to know - your guide to payroll legislation and reporting for the most up to date data.