The first thing to note is that for businesses with taxable profits of £50,000 or less, there will be no change to the 19% rate. This is of course great news for smaller businesses.
So, who will be paying 25% corporation tax? Well, the full 25% rate will only apply if taxable profits exceed £250,000. Profits falling between the lower threshold of £50,000 and the upper threshold of £250,000 will be taxed at a tapered rate (effectively a sliding scale between 19% and 25%).
It’s important to note that that it is not always this simple. For example, the amount of associated companies can affect the corporation tax rate that a business pays
For business whose profits are over the small profits threshold, it will be important to think about the timing of investment decisions, and the use of corporation tax losses that may have accumulated in the past. Carrying tax losses back for a repayment may not be the best decision if you can offset against profits taxed at 25% in the future.