Last year Rishi Sunak announced an increase in the rate of corporation tax (CT) to be effective from 1 April 2023.

This was going to affect UK corporations generating more than £250,000 profit.

On 7 September 2022, new prime minister Liz Truss announced that the increase in the rate of Corporation Tax would be scrapped along with the reversal of National Insurance increases.

After Rishi Sunak’s plans to drive overall taxes to a 70-year high, Liz Truss says the tax cuts are “affordable within our current fiscal rules”.

What does this mean for businesses?

UK corporations subject to corporation tax will continue to only pay 19% on their taxable profits*. There will be no marginal relief system implemented for the greater than £250,000 profit band.

*There are different Corporation Tax rates for companies making profits from oil extraction and oil rights in the UK. See click here for more details