Gerry MacCrossan
In the March 2021 budget, Rishi Sunak announced that the rate of corporation tax would increase to 25% from the 1st of April 2023 when 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.
Nevertheless, the planned increase will now not go ahead in line with the promises made by Liz Truss in her campaign to be Conservative Party leader and Prime Minister.
All companies currently paying corporation tax at 19% will continue to do so.