Mar 3, 2021
Budget 2021: Tax on company profits to rise to 25%
The rate of corporation tax, paid on company profits, is to rise to 25% from 19%, starting in 2023. Mr Sunak maintained that even with the rise to 25% "The UK will still have the lowest corporation tax rate in the G7" group of leading nations. There will be a taper above £50,000, so that only businesses with profits of £250,000 or greater will be taxed at the full 25% rate - about 10% of firms. Despite Mr Sunak's assertion that the UK's corporation tax rate would still be favourable on international comparisons, law firm Clifford Chance said the hike would make the UK's effective rate higher than that of other key nations. "The surprising effect of the rise in corporation tax is that the UK will have one of the highest effective rates in the world, almost level with the French rate, and much higher than the US or German rate," said Dan Neidle, tax partner at the law firm.
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