Corporation tax in 2023
How the April tax rise affects SMEs.
After multiple policy U-turns and much uncertainty, the main rate of corporation tax will rise from 19% to 25% from 1 April 2023, affecting companies with profits of £250,000 and over.
The legislation provides that small companies with profits up to £50,000 will continue to pay corporation tax at 19%, with profits between the two limits being subject to a tapered rate.
All UK companies must pay corporation tax on the profits they generate, while the profits of unincorporated businesses, such as sole traders and partnerships, are subject to Income Tax via self-assessment.