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2023: United Kingdom Corporation Tax increase to 25%

The HMRC announced the increase of the amount of Corporation tax companies will have to pay. The increased tax is directly linked to the amount of profit a business has made. The increase will be effective from April 1st, 2023.

Companies with earnings from £50,000 to £250,000 will be taxed at the main rate, reduced by a marginal relief. This provides a gradual increase in the effective Corporation Tax rate.


If taxable profits are between £0 to £50,000 then companies will have to pay the Small Company Rate of the 19%.

If the company’s taxable profits are between £50,000 to £249,000 then the rate is 25% and the company can decrease the Corporation Tax bill by requesting Marginal Small Companies Relief (MSCR).

If the company’s taxable profits are over £250,000 the Main Rate of 25% will apply to all profits.


Who pays Corporation Tax

All UK limited companies that are liable to pay in the UK are obliged to pay Corporation Tax on their annual profits.


The company director, or directors, are accountable for making sure Corporation Tax returns for a company are filed with HMRC (His Majesty’s Revenue and Customs), and that all taxes have been paid, by the appropriate deadline.



Corporation Tax can be paid electronically, at a bank or at a post office. The Corporation Tax bill can be paid by CHAPS, online or over the telephone if same day payment is required.

BACS transfers, direct debits and credit or debit card payments usually take around three working days. For full instructions on how to pay your corporation tax, consult the UK Government website.


Tax deadline

The Corporation Tax return deadline is usually 12 months after the end of the accounting period the return covers.

Companies must note that the deadline to pay a Corporation Tax bill is separate and is usually 9 months and one day after the accounting period ends and that missing deadlines will result in penalties.

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