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Corporation Tax


Every incorporated company that is based in the UK is subject to Corporation Tax on their profits. This includes clubs and societies, trade associations, housing associations, and co-operatives. Companies that are non-UK based can still be expected to pay Corporation Tax, if the centre of management is based in the UK.

Once your company is incorporated you will receive documents from HM Revenue & Customs (HMRC) to complete; this will let them know that you are liable for corporation tax.

If your company is liable for corporation tax, you must calculate how much taxable profit your company made over the course of the financial year, and what is owed to HM Revenue & Customs.

Corporation tax is currently split into two separate rates*:

  • The standard rate is set at 30% (this will be reduced to 28% as of 5th April 2008), but this applies only to companies with annual profits that total more than £1,500,000.
  • For companies with profits falling below £300,000, corporation tax will be charged at a Small Companies’ Rate of 20% (increased to 21% as of 5th April 2008).
  • Between these two profit margins the Marginal Small Companies’ Relief (MSCR) applies. This offers a tapering rate that helps to make the transition from the lower to the upper rate smoother.

* Please note that these corporation tax rates change, and it is important to use a professional to ensure compliance and tax advantages happen.

Payment

If you need to make a payment in relation to Corporation Tax, you can visit our Online Payments page.

If you would like any further information about our taxation services, or have any questions or comments, please contact us.

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