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Corporation Tax Rate Change - Effective April 2023

During the Spring Budget the Chancellor, Jeremy Hunt, confirmed that Corporation Tax will rise from 19% to 25% in April 2023.

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During the Spring Budget the Chancellor, Jeremy Hunt, confirmed that Corporation Tax will rise from 19% to 25% in April 2023.

For businesses with profits under £50,000, the Corporation Tax rate will remain at 19%.

The Government have estimated that around 70% of all trading companies have profits below the £50,000 threshold.

An effective rate of 26.5% will be applied to profits between £50,001 and £250,000.

Frequently Asked Questions

The current tax rate is 19% and will remain at 19% until April 2023.

The Corporation Tax rate in April 2023 is set to increase to 25% for businesses with profits over £250,000.

From April 2023, there will be a small companies tax rate of 19% for profits under £50,000.

There will then be an effective rate of tax of 26.5% for profits between £50,001 and £250,000.

There is an effective tax rate of 26.5% to ensure that those with profits over £250,000 are taxed at 25%. This is illustrated below:

  • First £50,000 taxed at 19% = a tax liability of £9,500
  • Next £200,000 taxed at 26.5% = a tax liability of £53,000
  • The total tax charged on first £250,000 profits = £62,500 (which is a tax rate of 25%)

To compare how your Corporation Tax liability could increase from April 2023, please click HERE to access a Champion calculator.

Should you require any additional information, please contact a Champion advisor on 0161 703 2549.