Carl Bayley

The Company Tax Changes and How to Plan for Them Carl Bayley

This brand new guide covers the three major changes to company taxation announced in the March 2021 Budget:




The increase in corporation taxThe new 130% Super DeductionThe more generous rules for losses




Taken as a package these changes are relevant to companies of all sizes, whether carrying on a trade or investing in property.




The increase in corporation tax means there will be three tax rates applying from April 2023: 19% (profits £50,000 or less), 26.5% (profits between £50,000 and £250,000) and 25% (profits over £250,000).




The higher rates will affect some companies from as early as May 2022.




This guide shows how companies can maximise their tax savings both before and after the increase, for example by delaying spending or bringing forward income and capital gains. In one example a company saves £32,250 by selling an investment property by 31st March 2023.




At present having more than one company does not affect the amount of corporation tax payable. After the change, having an additional associated company will sometimes have a tax cost, but will sometimes save you tax.




The guide also provides full details of the extraordinary 130% Super Deduction, where companies can deduct up to 130% of their expenditure on items like new trucks and vans, machinery, furniture and computer equipment from their taxable profits.




Finally we take a look at the temporary extension to the rules that allow companies to carry trading losses back to earlier accounting periods. This extension will allow some smaller companies to bring in extra tax refunds of up to £76,000.