Chancellor Kwasi Kwarteng announced a reversal of the planned increase in Corporation Tax in his mini-budget on 23 September 2022. [This proposal was reversed by the Prime Minister on 14 October 2022]

  • Under the previous government’s plans, the rate of Corporation Tax was to increase from 19% to 25% from April 2023 for firms making more than £250,000 profit.
  • This increase has been permanently cancelled. The rate will remain at 19% for all companies, regardless of the amount of profit made.
  • As a result, the rate of Diverted Profits Tax (DPT) which was due to increase to 31% from April 2023 will remain at 25% to retain the 6% difference between DPT and the main rate of Corporation Tax.

Useful guides on this topic

Mini-budget 2022: at a glance
A summary for SMEs and their owners

Rates and allowances
A guide to the various Corporation Tax rates over the past few years and an overview of the previous marginal relief calculation.

Tax savings on incorporation
It may be possible to save tax by running a business through a company. It depends on the combination of many different factors. 

Year-end tax planning review
Year-end tax planning review checklist. 

External link

The Growth Plan 2022: policy paper 

The Growth Plan 2022: Factsheet on Corporation Tax

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