Year-End Tax Guide 2023/24: Corporation Tax  

Learn about new rates, deductions, and the key considerations. Optimize profits with proactive tax planning for your business.

January 26, 2024
Year-End Tax Guide 2023/24: Corporation Tax  

Understanding the Changes  

On 1 April 2023, the main rate of corporation tax rose from 19% to 25% for companies with profits over £250,000.    

A new ‘small profits rate’ of 19% applies to smaller entities with profits of up to £50,000, while most UK companies with profits between £50,000 and £250,000 can claim marginal relief to reduce their liabilities.  

Companies need to keep accounting records and prepare company tax returns.    

Payment is usually due 9 months and 1 day after the company’s accounting period, while company tax returns are usually due 12 months after the company’s accounting period.    

However, larger companies may be required to pay via quarterly instalments depending on the profits being made.    

Business Deductions  

When you’re working out your business’s taxable profit, you can deduct any costs that were incurred “wholly and exclusively” for the purposes of the trade.    

These could include the cost of travel, staff salaries, pension contributions, bills for your business premises, advertising and marketing, and training.  

Directors’ bonuses can also be claimed as a deductible cost, as long as they are paid within nine months of the company year-end, and the entitlement to the bonus is established before the accounting date.    

You may also be able to claim capital allowances for assets you buy to keep in your business, such as equipment, machinery and business vehicles.  

Key Considerations  

  • Think about your company’s expected profits for this financial year. Proactive corporate tax planning can help you minimise the impact of the corporation tax rise.  
  • If you are due a director’s bonus, have you accrued it in the annual accounts as a deductible cost?  
  • Have you paid any employer pension contributions? These must be paid before the year-end to get tax relief in the accounting period.  
  • Are you paying a member of your family a salary? Salaries can be paid to family members as long as they are justifiable and at commercial rates.  
  • Have you considered tax-efficient ways of extracting profits, such as dividends, pension contributions and benefits-in-kind?

Year-End Tax Guide 2023/24  

If you would like to access our full year-end tax guide, simply click here to view the PDF.    

Alternatively, you can view an area specific mini blog from the list below:    

1. Personal Allowances and Reliefs    

2. ISAs  

3. Pension Contributions  

4. Inheritance Tax

5. Property Tax

6. Capital Gains Tax  

7. Business Asset Disposal Relief

8. Non-Domiciled Tax

9. Tax-Efficient Staff Benefits

10. VAT  

11. Penalties    




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