The main rate of corporation tax will increase from 19% to 25% on 1 April 2023.
For businesses with accounting periods which straddle 1 April, profits will be time apportioned.
Businesses with profits of less than £50,000 will continue to be taxed at 19%, for businesses with profits of between £50,000 and £250,000 a tapered rate will apply.
These thresholds will be reduced for companies in a corporate group or with other associated companies.
Depending on the company’s year-end, it could be advantageous to accelerate taxable profits so they fall before the period ends and are potentially taxed at a lower rate. For companies with a March year end, this would mean they are taxed at the lower rate of 19% rather than 25%.
Companies may also want to consider cash flow, as tax will typically be due 12 months earlier on profits arising before the company year-end rather than after.