Don’t forget that corporation tax rates increased to 25% from 1 April this year for business profits over £250,000. If your profits are below £50,000 then you still pay tax at 19%. If your profits lie between £50,000 and 250,000 then you pay a marginal rate of 26.5%.
So how does this work if your year end isn’t April?
Say you have profits of £300,000 for the year ended 30 September 2023. 6/12 of your profit will be taxed at the old rate of 19% and 6/12 will be taxed at the new rate of 25%.
Although we have software that works this out for us we still do a quick calculation to double check that we have input everything correctly.