Companies spared tax rise

Written by yasiradnan94
4 October 2022

Last year the Chancellor Rishi Sunak proposed increasing corporation tax rates such that companies with annual profits of over £250,000 would pay tax at 25%. Those with annual profits of less than £50,000 would continue to pay tax at 19% but a marginal tax rate of around 26.5% would apply on profits between £50,000 and £250,000.

The new Chancellor Kwasi Kwarteng has decided to keep the main rate of corporation tax at 19% at all profit levels. This will certainly keep corporation tax calculations simple and benefit profitable companies with higher profits.

Companies can currently claim a super deduction of 130% of the cost of new equipment purchased before April 2023. This deduction is likely to be modified or scrapped as it was introduced to encourage companies to invest before the corporation tax rate increased to 25%.

Instead businesses will be encouraged to claim under the annual investment allowance (AIA) which gives 100% relief for the cost of any qualifying equipment whether it was purchased new or second hand. The AIA can cover purchases totalling up to £1m per year and this cap will now be kept at that level indefinitely.

Making Tax Digital – time to prepare!

In just over a year the first tranche of sole traders and landlords will be required by law to keep digital records to comply with the requirements of Making Tax Digital for Income Tax (MTD IT) From April 2026, taxpayers with qualifying trading and property income of...

Major Inheritance Tax Changes from April 2025: What You Need to Know

From 6 April 2025, the UK will introduce a residence-based system for inheritance tax (IHT), replacing the current domicile-based rules . This change significantly impacts individuals who have been UK residents for an extended period, as well as trusts holding non-UK...

Making tax digital threshold reduced to £20,000

Many more sole traders and landlords will be required to comply with making tax digital (MTD) for income tax when the qualifying income threshold is reduced from £30,000 to £20,000. The Budget confirmed that taxpayers with qualifying income of £50,000 or more will be...

Related Posts

Self Assessment and student loan repayment

Self Assessment and student loan repayment

From April 2026 most benefits in kind (BIKs) will have to be processed through the payroll and included on monthly payslips, with a potential knock-on effect for student loan repayments. The mandatory payrolling of BIKs will be implemented in phases, starting from...

High-income child benefit charge via PAYE

High-income child benefit charge via PAYE

From August 2025 employed taxpayers will no longer be required to complete a self assessment tax return (SATR) to declare and pay the high-income child benefit charge (HICBC). The HICBC is a tax charge paid by the higher earning parent which claws back up to 100% of...

Making Tax Digital – time to prepare!

Making Tax Digital – time to prepare!

In just over a year the first tranche of sole traders and landlords will be required by law to keep digital records to comply with the requirements of Making Tax Digital for Income Tax (MTD IT) From April 2026, taxpayers with qualifying trading and property income of...

We use contact information you provide to us to contact you about our relevant content, products, and services. You may unsubscribe from these communications at any time. For information, check out our Privacy Policy.

Open chat
Hello 👋
Can we help you?