Business Tax Rates and Bands 2023/24
|All profits and gains (note 1)|
Small profits rate (companies with profits under £50,000)
Main rate of corporation tax (companies with profits over £250,000)
|Limits for marginal relief||£50,000 - £250,000||n/a|
|Standard fraction for marginal relief||3/200||n/a|
|S.455 tax on loans made by close companies to participators||33.75%||33.75%|
Note 1: From April 2023, the main rate is increased to 25% for business profits made by the company over £250,000. Companies with profits between £50,000 and £250,000 will pay tax at the main rate reduced by a marginal relief providing a gradual increase in the effective corporation tax rate.
|Main writing-down allowance (reducing balance)||18%||18%|
|Special rate writing-down allowance (reducing balance)||6%||6%|
|Structures and buildings allowance (SBA)||3%||3%|
|Full expensing (main rate plant and machinery) (note 2)||100%||n/a|
|Full expensing (special rate plant and machinery) (note 2)||50%||n/a|
|Note 2: Full expensing allows the deduction of 100%/50% of the cost of certain plant and machinery from the profits before tax. This measure is effective from 1 April 2023 to 31 March 2026.|
|Motor cars if CO2 > 1/km but does not exceed 50g/km)||18%||18%|
|Motor cars if CO2 > 50g/km||6%||6%|
|First-year allowances (FYA) – New and unused motor cars if CO2 emissions are 0 g/km or car is electric (note 3)||100%||100%|
Note 3: From April 2021, the thresholds for FYA will be reduced from 50g/km to 0g/km. Main rate of 18% capital allowance will be applicable for business cars with CO2 emissions not exceeding 50g/km. Business cars with CO2 emissions exceeding 50g/km will be eligible for writing-down allowance at the special rate of 6%.
|Small pool write-off where written-down value (WDV) is £1,000 or less||100%||100%|
|FYA for electric charge points||100%||100%|
|Annual investment allowance (AIA) (note 4)||£1,000,000||£1,000,000|
Note 4: Annual Investment Allowance has been confirmed at a permanent rate of £1 million from 1 April 2023.
|Research and development tax credit rates||2023/24||2022/23|
|Research and development (R&D) SME payable credit (note 5)||10%||14.5%|
|Research and development expenditure credit (RDEC) scheme||20%||13%|
|R&D Intensive SME payable credit (note 6)||14.5%||n/a|
|Film/high-end TV/videogames tax credit (note 7)||25% (34%)||25%|
|Animation and Children’s tax relief (note 8)||25% (39%)||25%|
|Open-ended investment companies and authorised unit trusts||20%||20%|
Note 5: for accounting periods beginning on or after 1 April 2021, the amount of SME payable R&D tax credit that a business can receive in any one year will be capped at £20,000 plus three times the company’s total PAYE and NICs liability.
Note 6: a company is considered R&D intensive where its qualifying R&D expenditure is worth 40% or more of its total expenditure.
Note 7: the rate will be increased from 25% to 34% from 1 January 2024.
Note 8: the rate will be increased from 25% to 39% from 1 January 2024.
|Flat rate of VAT on gross turnover (for limited cost trader)||16.5%||16.5%|
|Normal scheme registration threshold||£85,000||£85,000|
|Cash and annual accounting scheme – maximum to join||£1,350,000||£1,350,000|
|Cash and annual accounting scheme – exit threshold||£1,600,000||£1,600,000|
|Flat-rate scheme – maximum allowed to join||£150,000||£150,000|
|Flat-rate scheme exit threshold||£230,000||£230,000|
|Annual tax on enveloped dwellings (ATED)||2023/24||2022/23|
|More than £0.5m but not more than £1m||£4,150||£3,800|
|More than £1m but not more than £2m||£8,450||£7,700|
|More than £2m but not more than £5m||£28,650||£26,050|
|More than £5m but not more than £10m||£67,050||£60,900|
|More than £10m but not more than £20m||£134,550||£122,250|
|More than £20m||£269,450||£244,750|
ACCA LEGAL NOTICE - This is a basic guide prepared by ACCA UK's Technical Advisory Service for members and their clients. It should not be used as a definitive guide, since individual circumstances may vary. Specific advice should be obtained, where necessary.
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