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The New Corporation Tax Regime (PDF)

Ensure your company benefits from the positive changes and can mitigate the negative

A Tips & Advice Special Report about...

In a nutshell

1 April 2023 will be a watershed moment for corporation tax, with the first rate increase in the main rate since 1973. This Special Report shows you the impact of this change, and how you can mitigate its effect with advance planning. It also looks at the new super-deduction, a flagship tax incentive intended to get companies making capital investment now, rather than waiting for the rate increase. However, a look at the detail reveals a number of hidden traps. Finally, it examines the extension to loss relief for companies, and considers whether it is worth using.

In detail

The New Corporation Tax Regime provides answers to questions such as:

  • Will the rate increase mean the end of small business incorporations?
  • Can a company save tax by changing its year end ahead of the change?
  • Are there ways to change the timing of income and expenses?
  • Is it better to use the super-deduction or the annual investment allowance to relieve expenditure?
  • How will the super-deduction work for accounting periods that straddle 31 March 2023?
  • Is it better to use the loss extension or just carry forward?
  • Can relief be claimed before filing the tax return?

Written in plain English by experienced corporate tax practitioners, this Special Report is essential reading for anyone involved in the taxation of companies - from company directors to their advisors. Making use of the simple to follow advice will help ensure the effects of the upcoming changes are effectively mitigated and provide key tax planning opportunities.

We've created this Tips & Advice Special Report especially for... 

Anyone involved in the taxation of companies that wants to:

  • Mitigate the effect of the upcoming corporation tax increase
  • Take advantage of the tax planning opportunities

You'll get the following free extras with this Tips & Advice book... 

An online service with ready-to-use documents

  • To immediately apply our advice and solutions in practice
  • That you can easily adapt to suit your own requirements

In this Tips & Advice Special Report you'll read about...

1. Budget 2021 and companies: an overview

What was announced during Budget 2021?

What is the corporation tax rate rising to?

What is a “super-deduction”?

And the loss relief extension?

Why are the changes being made?

Do the changes also apply to unincorporated business, an LLP for example?

2. Corporation tax: a very brief recap

How are company profits taxed?

What is a company tax year?

Does the company accounting period have to match the financial year?

Why is the split important?

How are profits reported and taxed?

When is the tax due?

3. Increasing the main rate of corporation tax in 2023

What is changing in 2023?

What about companies with profits between these thresholds?

That seems quite a long-winded calculation, is there an alternative method?

Why is the fraction 3/200?

So, is this just a backwards step to re-enact old legislation?

What will happen if the accounting period isn’t twelve months long?

Our accounting year is 31 December, how will the change affect us in 2023?

Can we avoid the higher main CT rate by using multiple companies?

When are companies associated with each other?

Are there exceptions to the associated company rules?

4. Plan ahead and save tax

How can we mitigate the effect of the change?

How can we defer expenses?

What about deferring pension contributions?

Is it possible to accelerate income ahead of April 2023?

Could a stock take help a retail company?

What about realising capital gains sooner?

Could we save tax by changing our year end?

5. What will the increase mean for incorporation and small company profit extraction?

Will it still be worth incorporating a sole trade business to save tax?

So, is this the end for small incorporations?

Would a partnership be an alternative option?

What the sole trader doesn’t have a second person to bring in?

6. Making the most of the super-deduction

What is the super-deduction?

What qualifies for the 130% deduction?

What are the exclusions?

Are there any opportunities for non-companies?

What happens if the accounting period straddles 31 March 2023?

How does this interact with capital allowances and pooling etc.?

What about the 50% deduction?

What are integral features?

7. Loss relief extension – what’s the full story?

How do companies relieve losses?

So, what does the extension do?

Will the extension always be worth claiming where available?

How is a claim made?

What about groups of companies?


Appendix A - Guidance on corporation tax filing and payments

Appendix B - Table of CT payable for companies within marginal rate relief range

Appendix C – Commercial interdependence

Appendix D – Template carry back loss claim

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