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 £250,000.
  • The tax rate for companies with small profits under £50,000 will remain at 19% and there will be relief for businesses with profits under £250,000.
  • 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:
    1. Unincorporated businesses and companies that are not members of a corporate group will be able to obtain relief for up to £2 million of losses in each of 2020-21 and 2021-22.
    2. Companies that are members of a corporate group will be able to obtain relief for up to £200,000 of losses in each of 2020-21 and 2021-22 without any group limitations.
    3. Companies that are members of a corporate group will be able to obtain relief for up to £2 million of losses in each of 2020-21 and 2021-22, but subject to a £2 million cap across the group as a whole.