The main rate of corporation tax (CT) will jump from 19% to 25% with effect from 1 April 2023. Apart from the substantial increase in the tax burden to most companies, tax advisers should ensure that they are familiar with the mechanics of the tax calculation, particularly where groups of companies are involved, for those with accounting periods which straddle 1 April 2023, and the mechanics for the calculation of the CT charge for companies with augmented profits falling between £50,000 and £250,000. For large or very large corporate groups within the scope of the QIPs regime, the issue of timing and cash flow could also be a significant additional factor to be considered. Finally, advisers should be wary of the knock-on effects that the increased tax rate will have from a planning perspective.
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The main rate of corporation tax (CT) will jump from 19% to 25% with effect from 1 April 2023. Apart from the substantial increase in the tax burden to most companies, tax advisers should ensure that they are familiar with the mechanics of the tax calculation, particularly where groups of companies are involved, for those with accounting periods which straddle 1 April 2023, and the mechanics for the calculation of the CT charge for companies with augmented profits falling between £50,000 and £250,000. For large or very large corporate groups within the scope of the QIPs regime, the issue of timing and cash flow could also be a significant additional factor to be considered. Finally, advisers should be wary of the knock-on effects that the increased tax rate will have from a planning perspective.
If you are not a subscriber, subscribe now to read this content.
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