Baines Jewitt warns that the 6% rise in Corporation Tax, effective from the 1st of April 2023 will have a significant impact on local businesses, and is recommending that any business that will be impacted by the tax rise should discuss it with their advisers.
The dramatic increase in Corporation Tax has been on the cards for some time, with a rise to 25% (from the current 19%) for businesses with profits exceeding £250,000, but there were doubts over whether it would actually happen – especially with Liz Truss attempting to cancel it in her mini budget in 2022.
For businesses with profits under £50,000 the Corporation Tax remains at 19%, although an effective Corporation Tax rate of 26.5% is applied to profits between £50,001 and £250,000.
There are some tax mitigation options for businesses to consider, including 100% tax relief for investment in fixed assets, and an extension of R&D qualifying expenditure to include data and cloud computing costs.
