9 February 2023

It’s time to plan ahead for the upcoming corporation tax changes…

As we highlighted in our Autumn Statement 2022 digest, the main rate of corporation tax is increasing from 19% to 25% on the 1st April 2023 for those companies with profits over £250,000, and the ‘super-deduction’ for capital allowances is coming to an end on 31st March 2023.

Ahead of these upcoming changes, it’s definitely a good idea to assess how you’ll manage the increased rate, should it apply to you, and consider the timing of the changes to utilise the relief. More on this below.

super-deduction for capital allowances


Since 1st April 2021, companies have been able to claim enhanced capital allowances under the super-deduction regime which allows them to claim 130% relief on any qualifying expenditure.

This regime ends on 31st March 2023, so if you’re thinking of making any substantial capital purchases (like equipment, computers, furniture), it might be worth making these sooner rather than later so you can claim back cash on your investments. Here’s a guide to super-deduction from HM Treasury.

corporation tax rate changes


From 1st April 2023, there’ll no longer be a one-size-fits-all approach to corporation tax – it all depends on the level of your profits as follows:

  • The main rate of corporation tax will increase from 19% to 25%.
  • If your company has taxable profits of £50,000 or less, there’s no change and you’ll continue paying tax at 19%.
  • If your company has taxable profits between £50,000 and £250,000, you’ll have to pay tax at a marginal rate. This new regime will give opportunity for tax planning, especially for groups of companies.
  • If your company makes taxable profits over £250,000, you’ll need to pay the new main rate of 25%. This increased tax burden will need to be reflected in upcoming budgets.


something not adding up?

With these changes in mind, our specialist tax advisors can help with your tax planning. All you need to do is drop them an email.