CORPORATION TAX

 

Corporation tax is paid on the profits made by companies, housing associations, trade associations, members' clubs, societies and associations, and by groups of individuals (such as co-operatives) who gather together for the purpose of carrying on a trade, even though they may not be incorporated; however corporation tax doesn’t apply to partnerships.

 

Corporation tax is paid depending on the level of profits that the comany makes:

        

With profits between £0 to £300,000 tax is paid at the small company rate of 20%.

 

For profits over £1,500,000, tax is at the main rate of 23%.

 

Between £300,000 and £1,500,000 profits are taxed at the main rate of 23%, less marginal relief (calculation).

 

There are particular rules as to what are allowable expenses for calculating taxable profits, and certain expense might be disallowed. For example instead of depreciation, capital allowances are used in calculating taxable profit, and client entertaining is also disallowed.

 

Corporation tax is due 9 months and 1 day after the close of the company’s accounting period. Accounting periods are usually 12 months in duration, but for various reasons companies may trade for longer periods. If a long period occurs, HMRC will split the accounting period into two, with 12 months being the first, followed by the remaining months in the second.

 

If you are trading through a company and you require assistance in preparing your corporate tax,                  

 

For more information from the HMRC website go to