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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.

 

Charities & Not For Profit

We have been providing charity clients with high quality, specialist advice and service for many years, and our charity clients range from small village halls to large national organisations...

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Farming Industry

The largest industry sector that we deal with is farming, as you would expect in a rural practice. This means that we have developed considerable expertise in this field...

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