How to manage the Corporation Tax rises
From 1st April 2023 the main rate of corporation tax increased from 19% to 25% in the following way:
19% for companies with profits below £50,000
26.5%, marginal relief, for companies with profits between £50,000 and £250,000
25% for companies with profits above £250,000
How companies can reduce their taxable profits
- Pay pension contribution
- Buy equipment
- Pay a bonus to directors or staff
- Accrue any costs that relate to the period
- Reduce the value of stock where items are not worth the value they are included at
- Make a provision against bad debts
Items which will not reduce taxable profits
- Paying dividends
- Buying more stock
- Extra depreciation
- Paying in advance for costs that relate to a future period
If you need help submitting your corporation tax return then contact us.
