Business Tax Rates and Bands 2024/25

Corporation tax2024/252023/24
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)


Limits for marginal relief £50,000 - £250,000£50,000 - £250,000
Standard fraction for marginal relief3/2003/200
S.455 tax on loans made by close companies to participators33.75%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 allowances2024/252023/24
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/km18%18%
Motor cars if CO2 > 50g/km6%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 allowances2024/252023/24
Small pool write-off where written-down value (WDV) is £1,000 or less100%100%
FYA for electric charge points 100%100%
Annual investment allowance (AIA)*£1,000,000£1,000,000
AIA rate100%100%

* Annual Investment Allowance has been confirmed at a permanent rate of £1 million from 1 April 2023.

Research and development tax credit rates2024/252023/24
SME R&D tax credit deduction raten/a186%
Research and development (R&D) SME payable credit*n/a10%
Research and development expenditure credit (RDEC) scheme n/a20%
R&D merged scheme* 20%n/a
R&D Intensive SME deduction rate186%186%
R&D Intensive SME payable credit
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

* 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 box2024/252023/24
Patent box 10%10%

Standard rate 20%20%
Reduced rate5%5%
Zero rate0%0%

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)2023/242022/23
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*2024/252023/24
Small entity (less than £10.2m UK revenue)n/an/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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