UK VAT and corporation tax
The UK's standard rate of VAT is 20%, with a 5% reduced rate and a zero rate for specified supplies, and a registration threshold of £90,000 of taxable turnover since 1 April 2024. Corporation tax has been 25% on profits above £250,000 since 1 April 2023, with a 19% small profits rate on profits up to £50,000 and marginal relief between the two.
Key facts
| VAT standard rate | 20%; reduced rate 5%; zero rate 0% |
|---|---|
| VAT registration threshold | £90,000 of taxable turnover (deregistration £88,000), since 1 April 2024 |
| Corporation tax main rate | 25% on profits above £250,000, since 1 April 2023 |
| Small profits rate | 19% on profits up to £50,000, with marginal relief to £250,000 |
| CT return | Twelve months after the end of the accounting period |
| CT payment | Nine months and one day after the period end; large companies pay by quarterly instalments |
| Authority | HM Revenue & Customs (HMRC) |
Opens the assistant with United Kingdom already selected. Answers cite the law, guidance and cases they rest on.
VAT returns and Making Tax Digital
VAT returns are usually quarterly and are due, with payment, one month and seven days after the period end. All VAT-registered businesses must keep digital records and file through Making Tax Digital compatible software. For VAT periods starting on or after 1 January 2023, late submission is penalised under the points-based regime and late payment by separate percentage penalties.
Capital allowances and reliefs
Full expensing gives a 100% first-year deduction for qualifying plant and machinery, alongside the £1 million annual investment allowance. Research and development relief follows the merged scheme for accounting periods beginning on or after 1 April 2024, with an enhanced rate for R&D-intensive loss-making SMEs.
Precedent, not persuasion
UK tax judgments bind: the Supreme Court and Court of Appeal bind the Upper Tribunal, which binds the First-tier Tribunal. The assistant names the court that decided each case it cites and does not present a First-tier decision as settling a point a higher court has ruled on.
Frequently asked questions
- What is the UK VAT registration threshold?
- £90,000 of taxable turnover in a rolling twelve months, since 1 April 2024.
- What is the UK corporation tax rate?
- 25% on profits above £250,000 and 19% on profits up to £50,000, with marginal relief in between, for accounting periods from 1 April 2023.
Primary sources
- GOV.UK — VAT rates
- GOV.UK — Corporation Tax rates and reliefs
- HMRC manuals
- HM Revenue & Customs (HMRC)
Related guides
Disclaimer: This page provides general tax information based on publicly available primary sources, reviewed on the date shown. Rules are conditional and change; the page may not reflect a change made after that date, and it is not a substitute for advice from a qualified tax professional on your specific situation.