Businesses with profits below £50,000 will not be affected as the government has introduced a small profits rate for those companies. A tapered rate will also be introduced for profits above £50,000 so that only businesses with profits of £250,000 or more will be taxed at the full 25% rate.

The corporation tax hike is expected to raise an additional £17bn a year, bringing the annual corporation tax take to £70bn in 2023-24.

In line with the increase in the main rate, the diverted profits tax rate will rise to 31% from April 2023 to deter multinationals from diverting profits out of the UK.