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Corporation tax changes to consider from 1 April 2023

What is the new rate of corporation tax?

If your company makes profits of less than £50,000, the small profits rate of 19% will apply.

If your company makes profits of over £250,000, the main rate of 25% will apply.

If your company sits somewhere in the middle, ie. profits between £50,000 and £250,000, you will pay a tapered rate of corporation tax.

How can I plan for the increase?

Super deduction:

In addition to the main rate of corporation tax increasing, the super deduction can only be applied on purchases made up to 31 March 2023.

The super deduction allows companies to claim enhanced capital allowances of 130% on all qualifying plant and machinery purchases up to this date.

If your company has plans to make qualifying capital purchases in the year, it is worth considering bringing forward the purchase to benefit from the increased allowances. Of course, the cashflow implications of bringing forward the purchase date of capital equipment should be taken into consideration.

Any losses made in the year can be increased by the super deduction, meaning there are higher losses to carry forward and offset against future profits.

Loss utilisation:

It is important, where applicable, to ensure your historical losses are in order.

Legislation allowed for losses made between 1 April 2020 and 31 March 2022 to be carried back for three years, giving relief at 19%.

However, it is worth considering whether or not to carry those losses forward, potentially obtaining relief at a maximum of 26.5% (where profits are in the marginal rate band). Again, the cashflow implications should be a consideration when deciding on how to utilise losses.

The next step

For more information, please contact Sophie Glynn at, or contact your usual UHY adviser.

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