We’re back with another blog post and this time we’re diving into a topic that isn’t everyone’s cup of tea – taxes. But don’t worry, we’re here to make it as enjoyable and straightforward as possible. Strap in and let’s demystify the new corporation tax rules together.
What are the changes?
As of April 1st, 2023 (and no, it wasn’t an April Fool’s prank), there have been some significant changes in the corporation tax laws. Here’s the lowdown:
- Companies with profits that are playing a bit of hide and seek and total less than £50k will continue to be taxed at the friendly rate of 19%.
- Those with profits feeling a bit more confident, between £50k and £250k, will be greeted by a still reasonable tax rate of 26.5%.
- And for those brave souls whose profits exceed £250k, they’re looking at a flat rate of 25%.
Now, you might be wondering about this £50k threshold we mentioned. It’s not as roomy as it first appears. Much like sharing a dessert, this threshold needs to be split between your company and any other associated companies. The effect? Well, your slice of the pie could be smaller than you initially thought.
Fear not, your trusted accounting partners, should be on the case and we’re here to guide you through this labyrinth. Your accountant will need to know about any other companies you’re involved with, either as a shareholder or director. The same goes for any companies your family members are involved with. This isn’t us accountants just being nosy, promise! It’s all to ascertain whether the associated company rules apply to you and potentially other connected businesses.
We understand that these changes may feel a bit like navigating uncharted waters. If this is going to cause any tax-related stress, rest assured that we’re prepared to assist. We can work with you to plan the most tax-efficient course.
So, let’s sail through these tax changes together. As always, we are committed to lightening the load of tax law changes and making the journey as smooth and pleasant as possible.
Stay tuned for more updates and remember to keep those smiles on. After all, nothing is as certain as change… and taxes!