The UK’s tax legislation has seen significant changes in the past year, starting in April 2023, impacting both individuals and organisations. As business and charity accountants in London, we are committed to helping our clients navigate these updates with clarity and confidence.
One of the most recent and major changes is the rise in the corporation tax rate to 25% for companies with annual profits over £250,000. For small businesses earning less than £50,000 annually, the rate remains at 19%. Those with profits falling between these figures will face a graduated rate based on their earnings.
Moreover, the Diverted Profits Tax has increased to 31%, targeting large multinational corporations that shift profits out of the UK to avoid higher taxes. This move aims to discourage such profit-shifting practices.
The banking industry is now subject to an additional 3% corporation tax on profits exceeding £100 million.
Adjustments have also been made in terms of supporting innovation: The SME R&D relief rate has been reduced, while the Research & Development Expenditure Credit has been boosted from 13% to 20%, encouraging further investment in R&D.
For large multinational companies with operations in London, the new transfer pricing documentation requirements enforce detailed records to ensure fair tax treatment for international transactions.
These tax changes directly influence the financial planning of businesses and charities in the UK. As business and charity accountants in London, Allenby Accountants aims to demystify these complex regulations, ensuring your organisation operates efficiently and complies with the new laws.
If the recent tax reforms seem daunting, remember that as your business and charity accountants in London, we are here to offer guidance and support, helping you stay compliant and competitive in this new tax environment.
