great Britain has ended since this fiscal year, which started on April 1, with corporate tax The only company that charges tax, 19%. From now on it will depend on how much you earn. The government is obliged to seek recoveryrsos to plug the hole in public finances -a 5.4% deficit in 2022-, with expectations of an increase in collections of around 12,000 million pounds in the 2023-24 financial year.

Companies submitting a profits of up to £50,000 they will continue at the previous rate, of 19%, while those in excess of 250,000 pounds, about 10% of the total, will now be taxed at 25%. Those in the middle will pay their proportionate share.

It’s too early to measure impact, since the changes went into effect last April and companies had nine months to set up their accounts. The situation is different in large companies, because their calendars are different and they agree with the Administration about tax advances.

This is substantial change in a country that started the century with a 30% corporate tax and gradually reduced it to 19%.

Javier Palacinpartner Tax & Advise, warns that Spanish companies in the UK should consider this section not only applies to individual companies, but to groups. “Suppose we have two companies – one in Spain and one in Great Britain – controlled by the same person. In this case, a 25% percentage will start from £125,000,” he explained. If there are five associated companies (even if only one in the UK), 25% will be applied of £50,000, the product of the £250,000 split between the five companies.

Hydrocarbon extraction

Other, more substantial changes still affect the companies whose activities it depends on hydrocarbon extraction or they have a right to, either on land or on the continental shelf, known in England as a ring fence company, the tax of which would rise to 30%.

Tax in benefit It is charged to local companies, foreign companies that have branches or offices in the UK, clubs and co-ops.

In addition to this increase, an additional 1.25 percentage point increase in dividend paymentswhich has already started to be implemented in April 2022. The measure represents around 1,000 million more pounds in collection.

Doing business in London

The changes could affect UK considerations for doing business. Last week, at a breakfast hosted by the Spanish Chamber of Commerce in the UK, the Secretary of State for Business, Markets and SMEs, Kevin Hollinrake, emphasized that the country continues to be a very attractive place to set up a business.

But think tank The US-based Tax Foundation, which has compared the countries OECDshowed that an increase in the corporate tax, together with the end of some deductions, would bring it down from 10th to 33rd (out of 38) on the list of countries with more favorable tax regime for companies, in a better position than France and Italy, but behind Germany, Canada, Japan and the United States.

AstraZeneca slammed the door

The effects of a profit tax hike — technically temporary — will be seen in the long term, but some companies have given clear signs they don’t like it. AstraZeneca it will invest $360 million in a new factory in Ireland, where taxes are lower. “You need an environment that generates profits and encourages investmentsaid the CEO of the pharmaceutical company, Sir Pascal Soriot.

palacin believes that the new tax situation will preserve the interests of companies wishing to do business in the UK, but make it less attractive to companies that see London as their platform to overcome other countries.