Business & Corporation Tax – United Kingdom

19% on profits up to £50,000. Beneficial rate for small companies. Thresholds divided by number of associated companies. Plan structure carefully if multiple companies.

Tapered rate between 19%-25% for profits £50,000-£250,000. Complex calculation. Effective marginal rate approximately 26.5% in this band due to taper mechanism.

25% on profits above £250,000. Increased from 19% in April 2023. Significant increase for larger companies. Consider profit extraction strategies.

100% capital allowance on qualifying plant and machinery up to £1,000,000. Excellent relief for equipment investment. Use it strategically for tax planning.

R&D reliefs available for innovation. SME scheme offers enhanced deductions. RDEC scheme for larger companies. Merged scheme from April 2024 simplifies rules. Must be genuine R&D.

Reduced 10% Corporation Tax rate on profits from patented inventions. Valuable for tech and pharma companies. Complex tracking and calculations required.

Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS) offer income tax relief to investors in qualifying startups. 50% relief SEIS, 30% EIS. Helps startups attract investment.

Must register for VAT if taxable turnover exceeds £90,000 in 12 months or expected to. Deregistration threshold £88,000. Voluntary registration available below threshold.

Standard VAT rate 20% on most goods and services. Must charge VAT, reclaim VAT on business purchases. Quarterly or monthly returns depending on scheme.

5% reduced rate on certain items: domestic fuel, children's car seats, some renovations. Zero rate (0%) on many foods, books, children's clothes, medicines.

MTD for VAT mandatory for VAT-registered businesses. Must use compatible software. Keep digital records. Submit returns via API. Quarterly or monthly. Plan to extend to Income Tax from 2026.