The government has today [Friday 14 October] announced that
Corporation Tax will increase to 25% from April 2023 as already
legislated for, raising around £18 billion a year and acting as a
down payment on its full Medium-Term Fiscal Plan.
The decision has been taken in recognition of the need to ensure
the UK’s economic stability and reassure markets of its
commitment to fiscal discipline, after elements of September’s
Growth Plan went further and faster than markets were expecting.
The Prime Minister has set out that the government is prepared to
do whatever is necessary to ensure debt is falling as a share of
the economy in the medium term and to ensure that taxpayers’
money is well spent, putting public finances on a sustainable
footing.
The previously announced small profits rate of Corporation Tax
will be maintained. Smaller or less profitable businesses will
not pay the full 25% rate, and companies with less than £50,000
of profit – the large majority – will not see any increase at
all, continuing to pay Corporation Tax at 19%.
The UK’s corporate tax regime will remain competitive and
supportive of growth at the 25% rate, continuing to be the lowest
rate in the G7. As part of the forthcoming tax review, the
government will look at how the tax system can go further to
promote growth and investment.
The government is committed to growing the economy and taking
forward supply-side reforms that will ignite strong and sustained
growth that delivers prosperity for the UK.
Chancellor of the Exchequer will set out the government’s
Medium-Term Fiscal Plan on 31 October, alongside a full forecast
from the independent Office for Budget Responsibility.
Contact Information
HMT Press Office
020 7270 5238
pressoffice@hmtreasury.gov.uk
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Notes to editors
- The around £18 billion raised per year through an increase in
the Corporation Tax rate to 25% is an approximate figure. The OBR
will assess the fiscal impact of the change on 31 October.
- The Chancellor will confirm the position on the Bank
Surcharge in the Medium-Term Fiscal Plan.
