Business Tax Rates and Bands 2024/25
| Corporation tax | 2024/25 | 2023/24 |
| All profits and gains (excluding determination agreements and diverted profits)* Small profits rate (companies with profits under £50,000) Main rate of corporation tax (companies with profits over £250,000) | 19% 25% | 19% 25% |
| Limits for marginal relief | £50,000 - £250,000 | £50,000 - £250,000 |
| Standard fraction for marginal relief | 3/200 | 3/200 |
| S.455 tax on loans made by close companies to participators | 33.75% | 33.75% |
* 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.
| Capital allowances | 2024/25 | 2023/24 |
| 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)* | 100% | 100% |
| Full expensing (special rate plant and machinery)* | 50% | 50% |
| * 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* | 100% | 100% |
* 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%.
| Capital allowances | 2024/25 | 2023/24 |
| 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)* | £1,000,000 | £1,000,000 |
| AIA rate | 100% | 100% |
* Annual Investment Allowance has been confirmed at a permanent rate of £1 million from 1 April 2023.
| Research and development tax credit rates | 2024/25 | 2023/24 |
| SME R&D tax credit deduction rate | n/a | 186% |
| Research and development (R&D) SME payable credit* | n/a | 10% |
| Research and development expenditure credit (RDEC) scheme | n/a | 20% |
| R&D merged scheme* | 20% | n/a |
| R&D Intensive SME deduction rate | 186% | 186% |
| R&D Intensive SME payable credit | 14.5% | 14.5% |
| R&D Intensive SME intensity ratio* | 30% | 40% |
| Film/high-end TV/videogames tax credit* | 25% or 34% | 25% (34%) |
| Animation and Children’s tax relief* | 25% or 39% | 25% (39%) |
| Open-ended investment companies and authorised unit trusts | 20% | 20% |
* 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
* From April 2024, both R&D tax credits and RDEC schemes are merged and relief is available at a flat rate of 20%. SME R&D payable credit is only available to R&D intensive companies.
* Loss-making SMEs whose R&D expenditure constitutes at least 40% (for expenditure incurred on or after 1 April 2023) or 30% (for accounting periods beginning on or after 1 April 2024) of total expenditure are referred to as ‘R&D intensive SMEs’.
* The rate will be increased from 25% to 34% from 1 January 2024.
* The rate will be increased from 25% to 39% from 1 January 2024.
| Patent box | 2024/25 | 2023/24 |
| Patent box | 10% | 10% |
| VAT | 2024/25 | 2023/24 |
| Standard rate | 20% | 20% |
| Reduced rate | 5% | 5% |
| Zero rate | 0% | 0% |
| VAT | 2023/24 | 2022/23 |
| Flat rate of VAT on gross turnover (for limited cost trader) | 16.5% | 16.5% |
| Normal scheme registration threshold | £90,000 | £85,000 |
| Deregistration threshold | £88,000 | £83,000 |
| 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 | £4,400 | £4,150 |
| More than £1m but not more than £2m | £9,000 | £8,450 |
| More than £2m but not more than £5m | £30,550 | £28,650 |
| More than £5m but not more than £10m | £71,500 | £67,050 |
| More than £10m but not more than £20m | £143,550 | £134,550 |
| More than £20m | £287,500 | £269,450 |
| Economic crime (anti-money laundering) levy* | 2024/25 | 2023/24 |
| Small entity (less than £10.2m UK revenue) | n/a | n/a |
| Medium entity (UK revenue £10.2m - £36m) | £10,000 | £10,000 |
| Large entity (UK revenue £36m - £1bn) | £36,000 | £36,000 |
| Very large entity (UK revenue more than £1bn) | £500,000 | £250,000 |
* The Economic Crime Levy (ECL) is an annual charge that will affect entities (organisations) who are supervised under the Money Laundering Regulations (MLR) and whose UK revenue exceeds £10.2 million per year.
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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