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    Howard + Co Accountants

    6 Market Street
    Birstall
    West Yorkshire
    WF17 9EN

    T: 01924 420844
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    You are in: Home » Resources » Tax Centre » Tax Rates And Allowances » Tax Rates

    Corporation Tax

    Rates

    The corporation tax rates for small and large companies was aligned at 20% from April 2015.. The rates for the three financial years to 31 March 2022 are as follows:

    Year beginning 1 April: 2021 2022 2023
    Corporate Tax Rate – Ring fenced 19% 19% 19%
    Corporate Tax main rate – Non-ring fenced 19% 19% 25%
    Corporate Tax small profits rate 19% 19% 19%
    From 1 April 2023, the Corporation Tax main rate for non-ring fenced profits will be increased to 25% applying to profits over £250,000. A small profits rate (SPR) will also be introduced for companies with profits of £50,000 or less so that they will continue to pay Corporation Tax at 19%. Companies with profits between £50,000 and £250,000 will pay tax at the main rate reduced by a marginal relief.

    Research and Development (R&D)

    Small and medium (SME) companies can claim enhanced deductions for expenditure on R&D projects at 230% of qualifying expenditure. Where the deduction is claimed and the company makes a loss, it can claim a cash credit from HMRC of 14.5% of that loss.

    Research and Development Expenditure Credit (RDEC) scheme

    Large companies can claim a 13% uplift on the following qualifying expenditure:

    • Staffing costs
    • Expenditure on externally provided workers
    • Software and materials
    • Contributions to independent research
    • Subcontractors of qualifying bodies and individuals/partnerships

    RDEC differs from the previous R&D scheme for large companies as it is an 'above the line' tax credit and can be accounted for in the profit/loss statement.

    Enterprise Zones

    Around 53 enterprise zones have been formed around the country to encourage investment and job formation. Businesses in some of those zones can claim 100% capital allowances on the equipment they use within the zone. The period for which those 100% allowance are available has been extended by three years to 31 March 2020.

    Super Deduction

    From 1 April 2021 until 31 March 2023, companies investing in qualifying new plant and machinery assets will be able to claim:

    • a 130% super-deduction capital allowance on qualifying plant and machinery investments
    • a 50% first-year allowance for qualifying special rate assets

    See our helpsheet an introduction to capital gains tax.

     

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