Is Corporation Tax like Corporation Pop?

March 15, 2021

If only it were.

Corporation Pop, our grandparents used to say, we could have as much as we wanted to.  It was free!  (Corporation Pop was/is a fond reference to tap water)  Unfortunately, the same can’t be said for Corporation Tax (CT).

We were expecting some Covid-19 recourse and recovery measures in the recent Budget announcement from the Chancellor, but the hike from 20% to 25% is a whopping rise that will affect businesses with profits of £250,000 plus from 1 April 2023 however the Chancellor suggested that the higher rate 25% will only affect around 10% of the business population.

For smaller businesses and those slowly starting to recover from the effects of lockdown then there is some good news, as Corporation Tax rate will remain at 19% for those operating with profits of up to £50,000.  It’s actually a reintroduction of the Marginal relief rate which used to be in place up to 2015.

Despite lots of publicity around Government Grants during Covid  – these have been increasingly scarce for many business owners, especially those without premises and/or run by a sole director of a Limited Company.  Aspire Accounts have been assisting clients with research into eligibility right the way through these past 12 months and occasionally, we’ve been able to recover money back from HMRC too.  That’s always good news to relay.

If you’re a company who has paid your previous CT bill before the payment date or have overpaid it, then HMRC owe you interest on those monies at 0.5%.  It’s not something that is widely publicized by HMRC but more importantly, you have to claim it, it’s not automatically calculated!  

Might you be due credit interest or repayment interest?  It’s worth having a conversation with your accountant to check if that claim should be included on your next Company Tax Return.  Every little helps