Corporation Tax
| Year to | 31.3.2025 | 31.3.2024 |
|---|---|---|
| Main rate (profits above £250,000) | 25% | 25% |
| Small profits rate (profits up to £50,000) | 19% | 19% |
| Marginal relief band (MRB) | £50k – £250k | £50k – £250k |
| Fraction in MRB (effective marginal rate) | 3/200 (26.5%) | 3/200 (26.5%) |
| Research and development relief | |
|---|---|
| Accounting periods beginning on or after | 1.4.2024 |
| R&D Expenditure Credit (RDEC) scheme* | 20% |
| R&D-intensive SMEs enhanced expenditure scheme** | 86% |
*Taxable expenditure credit for qualifying R&D.
**Additional deduction for qualifying R&D
R&D-intensive companies are those that have R&D expenditure constituting at least 30% of total tax-deductible P&L expenses plus capitalised R&D costs. Loss-making R&D intensive companies can claim a payable credit rate of 14.5% from HMRC in exchange for their losses (capped at £20,000 plus 3 x [PAYE & NIC]).
Previously, most SMEs used the enhanced expenditure scheme, but with a payable tax credit rate for losses of 10% (or 14.5%, from 1 April 2023, for those with R&D expenditure constituting at least 40% of total expenditure).