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Spring Budget 2021 – Corporation Tax

The Chancellor confirmed that the Corporation Tax main rate will remain at 19% from 1 April 2021 for the next 2 years. The main rate had been expected to increase to help pay the massive costs of the coronavirus pandemic to the public purse. 

However, the Corporation Tax main rate will increase to 25% from 1 April 2023 for companies with profits over £250,000. The Chancellor also announced the introduction of a Small Profits Rate (SPR) of 19% from the same date for companies with profits of up to £50,000. 

Where a company has profits between £50,000 and £250,000 a marginal rate of Corporation Tax will apply that bridges the gap between the lower and upper limits. The lower and upper limits will be proportionately reduced for short accounting periods and where there are associated companies.

The Diverted Profits Tax (DPT) will increase from 1 April 2023 from 25% to 31% to maintain the current 6% differential with the main rate of Corporation Tax. The DPT is an anti-avoidance measure that targets large multinational businesses that are deemed to be using contrived and artificial arrangements to divert profits overseas thereby paying less or no tax in the UK.

This announcement gives some short-term relief to businesses, many of whom had expected rates to increase before April 2023. 

Source: HM Government Wed, 03 Mar 2021 00:00:00 +0100

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Some accountancy websites also provide pages and pages of tax information, helpsheets, etc. We prefer to give clients personally tailored advice. So, if you want details of tax rates and allowances just go to the HMRC website on which you should find what you’re looking for. If you need more individual advice please contact us.

Below are links to websites you may find of interest, but as we like to support our local community and clients, we have included links to websites that may be of interest:

HMRC
FT
BBC
VEALE WASBROUGH VIZARDS
CESP
PRACTICE INDEX
SIMCOMM ACADEMY

More Local:
FOOTPLATE EXPERIENCE
ANGLEBURY PRESS
OFFCAMBER.CO.UK