Rates
The Corporation Tax rate for company profits is 19%.
You pay Corporation Tax at the rates that applied in your company’s accounting period for Corporation Tax.
You may be able to get deductions or claim tax credits on your Corporation Tax. These are known as reliefs.
Previous rates
Corporation Tax rates
The rate of Corporation Tax you pay depends on how much profit your company makes.
Rates for Corporation Tax years starting 1 April
| Rate | 2021 · | 2020 · | 2019 · | 2018 · | 2017 · | 2016 · | 2015 · | |
|---|---|---|---|---|---|---|---|---|
| Small profits rate (companies with profits under £300,000) |
– | – | – | – | – | – | – | |
| Main rate (companies with profits over £300,000) |
– | – | – | – | – | – | – | |
| Main rate (all profits except ring fence profits) | 19% | 19% | 19% | 19% | 19% | 20% | 20% | |
| Marginal Relief lower limit | – | – | – | – | – | – | – | |
| Marginal Relief upper limit | – | – | – | – | – | – | – | |
| Standard fraction | – | – | – | – | – | – | – | |
| Special rate for unit trusts and open-ended investment companies |
20% | 20% | 20% | 20% | 20% | 20% | 20% |
From 1 April 2015 there is a single Corporation Tax rate for non-ring fence profits.
For profits before 1 April 2015 use the Marginal Relief calculator to work out how much Marginal Relief you can claim on your Corporation Tax.
At Summer Budget 2015, the government announced legislation setting the Corporation Tax main rate (for all profits except ring fence profits) at 19% for the years starting 1 April 2017, 2018 and 2019 and at 18% for the year starting 1 April 2020. A further reduction to 17% for the year starting 1 April 2020 was announced at Budget 2016.
At Budget 2020, the government announced that the Corporation Tax main rate (for all profits except ring fence profits) for the years starting 1 April 2020 and 2021 would remain at 19%.
If more than one rate applies in your accounting period
Work out how many days each rate applied, then work out the tax due for each.
For example, if your accounting period is 1 March 2014 to 28 February 2015, you pay:
· the rate for the financial year starting 1 April 2013 for 31 days (1 March to 31 March)
· the rate for the financial year starting 1 April 2014 for 334 days (1 April to 28 February)
If your accounting period covers more than one Corporation Tax year
The Corporation Tax year runs from 1 April to 31 March.
Work out how many days each rate applied, then work out the tax due for each.
For example, if your accounting period is 1 March 2012 to 28 February 2013, you pay:
· the rate for the financial year starting 1 April 2011 for 31 days (1 March to 31 March)
· the rate for the financial year starting 1 April 2012 for 334 days (from 1 April to 28 February)
If your accounting period is shorter than 12 months
The small profits rate and main rate are for a whole year. The thresholds reduce in line with your accounting period. For example, if your accounting period is 6 months, the £300,000 small profits threshold is halved to £150,000.
Associated companies
Associated companies (where one company controls others) have a shared tax threshold. For example, if 1 company owns 3 others, divide the threshold by 4 when working out the Corporation Tax for each company. The small profits threshold is then £75,000 for each company.
2. Allowances and reliefs
You can deduct the costs of running your business from your profits before tax when you prepare your company’s accounts.
Anything you or your employees get personal use from must be treated as a benefit.
Some expenses aren’t allowed for Corporation Tax, eg entertaining clients – add these back to your profits when you prepare your Company Tax Return.
Capital allowances
Claim capital allowances if you buy assets that you keep to use in your business, eg:
· equipment
· machinery
· business vehicles, eg cars, vans, lorries
Other reliefs
You may be able to make a claim for:
· Research and Development (R&D) Relief
· The Patent Box if your company makes a profit from patented inventions
· reliefs for creative industries (CITR) if your company makes a profit from theatre, film, television, animation or video games
· Disincorporation Relief if you’re closing your company and becoming a sole trader, ordinary business partnership or limited partnership
Marginal Relief
You can only claim Marginal Relief if your company had profits between £300,000 and £1.5 million that were either:
· from before 1 April 2015
· from oil rights or extraction in the UK or UK continental shelf
