Budget October 2024 - Corporation Tax

There were no significant changes to Corporation Tax. Small businesses (those with taxable profits of less than £50,000) will continue to pay Corporation Tax at 19% and larger business with taxable profits in excess of £250,000 will pay Corporation Tax at 25%. Those businesses with taxable profits in between these two thresholds will effectively pay Corporation Tax at a rate somewhere between 19% and 25%. The Government have made a commitment to retain these rates for the duration of this parliament to provide a stable and predictable tax environment for companies trading in the UK.

It should be noted that the thresholds above are only applicable for those companies that have no ‘associated companies’. The thresholds will be reduced if a company is part of a group of companies or if there are other companies under common control.

Tax planning – those companies with profits between the two thresholds of £50,000 and £250,000 will actually pay a marginal rate of corporation tax of 26.5% on every £1 of taxable profits in excess of the £50,000 threshold. If business cash flow requirements permit, making Employer pension contributions, increasing salary levels of company officers and bringing forward planned purchases of company assets, to reduce taxable profits can offset some or all of the high marginal tax rate.