Increased corporation tax rate confirmed to go ahead in April 2023

Written by Chris Barlow


November 24, 2022

Despite previous decisions to cancel the increase, it has been confirmed that the main rate of corporation tax will go up to 25%.

In the September mini budget, ex-Chancellor Kwasi Kwarteng had announced that the increase in the rate of corporation tax for a lot of companies would not go ahead, as planned by the previous government. However, as Jeremy Hunt took over, he confirmed a back-track on this, clarifying that from April 2023 the rate will increase from 19% to 25% for companies with profits over £250,000.

It was also confirmed that the 19% rate of corporation tax will be used as a small profits rate, for companies with profits of £50,000 or less. Companies with profits between the two rates (£50,001 – £250,000) will be required to pay tax at the main rate, but reduced by a marginal relief. This will result in a gradual increase in the effective corporation tax rate. 

Not only this, but there will be changes to bank corporation surcharge, so that as of April 2023, banks will be charged an extra 3% rate on any profits they make over £100 million. Also from April 2023, the rate of diverted profits tax will increase from 25% to 31%, meaning that large multinational companies will pay fair tax in the UK.

If you require further clarification or advice about how corporation tax will impact your business, do not hesitate to get in touch with Chris Barlow:

[email protected]

+44 (0) 1 942 816 512

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