Corporation Tax Rates and Reliefs from 2023
As a consequence of the 2021 budget, from 1st. April 2023 corporation tax at 25% will mark a return to the era of the high company taxation of the 1990s.
Marginal relief for moderate SME profits, albeit at a 2/300 fraction, far less generous than was the case back in the 1990s will also make a comeback, this time for profits between £50,000 and £250,000.
Taxable profits not exceeding £50,000 will continue to be taxed by HMRC at 19%..Here are examples showing how the different tax charges and marginal relief will work out..
| Small Taxable Profits | From 2023 |
|---|---|
| Threshold | £50,000 |
| Taxable Profit | £45,000 |
| Applicable Corporation Tax Rate | 19% |
| Corporation Tax Charge | £8,550 |
| Marginal Profits £50,000 to £250,000 | From 2023 |
|---|---|
| Upper Threshold | £250,000 |
| less: Taxable Profit | £100,000 |
| Marginal Balance | £150,000 |
| Divide Marginal Balance by 200 | £750 |
| Multiply by 3 (equals Marginal Relief) | £2,250 |
| Tax at 25% of Taxable Profit | £25,000 |
| less: Marginal Relief | £2,250 |
| Corporation Tax Charge | £22,750 |
Taxable Profits Above £250,000
For all taxable profits above £250,000 .25% is the flat rate.
This means that none of the concessions above apply to the first £50,000 or to profits between that and the £250,000 threshold. HMRC will charge orporation tax at the rate of 25% on the whole of the taxable profit.
Figurewizard and Corporation Tax
When producing profit, balance sheet, cashflow and liquidity forecasts Figrewiard automatically calculates the corporation tax charge from your own predicted figures for sales, margin, overheads, finance and so on. The same goes for VAT.
Our sample corpration tax forecast clearly illustrates how that tax calculation is made, step by step.