The main rate of corporation tax (CT) jumped from 19% to 25% with effect from 1 April 2023 and will be a substantial increase in the tax burden to most companies.

Full details of the rates and rules relating to Corporation Tax are at https://www.gov.uk/topic/business-tax/corporation-tax . If profits are under £250,000 you should look to see if there are any associated companies (which change the thresholds below), but from 1 April 2023 the Corporation Tax rate changes to:

• 19% for taxable profits below £50,000 (small profit rate)
• 25% for taxable profits above £250,000 (main rate)

Marginal Relief provides a gradual increase in Corporation Tax rate between the small profits rate and the main rate — this allows you to reduce your rate from the 25% main rate.

A useful calculator is available at the link below;

Corporation Tax Calculator

Please contact us if you would like further advise on the new rates.