Budget 2021: Increase to corporation tax

It has today been announced that from 1 April 2023 the main rate of corporation tax will be increased from 19% to 25%. The highest corporation tax rate the UK has seen since 2011.

The Government have re-introduced a small profits rate of 19% for companies will profits below £50,000.

This will work as follows:

  • Companies with taxable profits of £50,000 of less will continue to pay corporation tax at 19%
  • Companies with taxable profits between £50,000 and £250,000 will pay 19% on the first £50,000 and £26.5% on the balance of profits up to £250,000
  • Companies with profits above £250,000 will pay 25% on the full amount.

The limits will be scaled down where companies are under common control or have short accounting period.

The small profits rate will not apply to close investment companies. 

Historic corporation tax rates over the years

Find out more

Visit our Budget 2021 hub for our latest commentary and to pre-order our exclusive Budget Summary and Tax Card.