- Corporation tax headline rate rise to match China’s 25 per cent announced for 2023.
- This is set to push the UK’s marginal effective rate to the highest among G7 (Canada, France, Germany, Italy, Japan, UK, US) and BRIC (Brazil, Russia, India, China) economies.
At 19 per cent, the UK enjoys the lowest headline rate of tax on corporate profits in the G7. Only Italy’s 24 per cent rate is lower than the 25 per cent rate the chancellor has announced will apply from 2023. However, headline rates are only part of the picture. Various allowances and exemptions apply which reduce the tax levied, and produce an effective marginal tax rate. Analysis of these rates shows a starkly different picture.