The higher rate will apply to companies that make profits of £250,000 or more.
The rate for smaller companies, with profits of up to £50,000, will remain at 19%.
Companies with profits of between £50,000 and £250,000 will pay tax at a hybrid rate. The effective rate of corporation tax for profits between £50,000 and £250,000 rises to 26.5%.
The increase will be mitigated to some extent for businesses making substantial investments in plant and machinery.
Related content from Claritax Books
Capital Allowances, by Ray Chidell and Jake Iles, offers in-depth coverage of plant and machinery allowances, structures and buildings allowances, and all other UK capital allowances. The book has very detailed and practical guidance on claiming allowances for fixtures in property that is bought or constructed.
Full reference is made throughout to legislation, case law and HMRC guidance.