Corporation Tax changes

From April 2023, the corporation tax rate will remain at 19% for companies with profits below £50k, but it will rise to 25% for all companies with profits over £250k.  The question is, what happens to those companies whose profits fall between £50k and £250k?

These profits will be taxed at 25%, less the “marginal relief”.

For example, your company makes taxable profits of £155,000, tax payable will be calculated as follows;

  • £155,000 x 25% = £38,750
  • Less marginal relief at 3/200 x (£250,000 – £155,000) = £1,425
  • Tax payable = £37,325
  • Which is a rate of 24.08%

Examples of tax planning strategies to help with the impact of these changes are, the timing of capital expenditure, contributions into company pension schemes etc.

Capital Allowances Super Deduction

Items which would have qualified for AIA or for inclusion in the main rate pool will attract a FYA of 130%, this comes to an end on 31st March 2023.

Capital Gains Tax thresholds

At present, your first £12,300 of gains are free of capital gains tax (CGT). This CGT-free allowance will now drop to £6,000 from April 2023 and £3,000 from April 2024 – meaning increasing amounts of CGT will be due on any gains you make from 2023 onwards.

Dividends Tax thresholds

Currently, your first £2,000 of dividend income is free of tax. This tax-free allowance will drop to £1,000 from April 2023 and £500 from April 2024, making it less tax-efficient to be paid dividends from your eligible company profits.


Speak to us (or your own accountant) about your own circumstances and ways to help make your tax affairs as tax efficient as possible. Speak to us at