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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

The rate you pay on profits from before 1 April 2015 depends on the size of the profits. Work out your profits when you prepare your Company Tax Return.

Your profits Rate From 1 April 2014 From 1 April 2013 From 1 April 2012
£300,000 or less Small profits rate 20% 20% 20%
Above £300,000 Main rate 21% 23% 24%

If you had profits between £300,000 and £1.5 million before 1 April 2015, you may be able to claim Marginal Relief to reduce your Corporation Tax.

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 one company owns 3 others, divide the threshold by 4. The small profits threshold is then £75,000 for each company.

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:

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