On 10 June 2021, the UK’s Finance Act 2021 received royal assent and was published in the Official Gazette. Some of the Key tax measures are following:
- The corporate tax rate will increase to 25% from April 2023 on profits over ÂŁ250,000.
- The tax rate for companies with small profits under ÂŁ50,000 will remain at 19% and there will be relief for businesses with profits under ÂŁ250,000.
- In line with the increase in the main rate, the Diverted Profits Tax rate will rise to 31% from April 2023.
- Extended loss carry back for businesses – to help otherwise viable UK businesses which have been pushed into a loss-making position, the trading loss carry-back rule will be temporarily extended from the existing one year to three years. This will be available for both incorporated and unincorporated businesses, as follows:
- Unincorporated businesses and companies that are not members of a corporate group will be able to obtain relief for up to ÂŁ2 million of losses in each of 2020-21 and 2021-22.
- Companies that are members of a corporate group will be able to obtain relief for up to ÂŁ200,000 of losses in each of 2020-21 and 2021-22 without any group limitations.
- Companies that are members of a corporate group will be able to obtain relief for up to ÂŁ2 million of losses in each of 2020-21 and 2021-22, but subject to a ÂŁ2 million cap across the group as a whole.