What profit threshold must companies exceed to incur an additional charge for corporation tax?

To determine the profit threshold at which companies incur an additional charge for corporation tax, it is essential to understand the structure of the UK corporation tax system, particularly regarding the main rate and the marginal relief available for companies whose profits exceed specific thresholds.

As of the latest regulations, the profit threshold that triggers the additional charge of corporation tax is indeed set at £250,000. This means that companies with profits exceeding this amount will not only pay the main rate of corporation tax on their profits but may also be subject to a marginal rate that applies to profits within a certain range above this threshold. This is part of the UK government's approach to ensure a balanced taxation strategy that aims to support smaller businesses while applying higher rates to more profitable entities.

Understanding this threshold is important for businesses as it affects cash flow and financial planning. Companies need to be aware of the servicing of taxes once their profits begin to exceed this threshold to manage their tax liabilities effectively.