Corporation Tax rates and reliefs
The Corporation Tax rate you pay depends on how much profit your company makes. You may be able to get deductions or claim tax credits on your Corporation Tax. These are known as ‘reliefs’.
Corporation Tax rate
The Corporation Tax rate may change on 1 April each year.
|Your profits||Rate||From 1 April 2011||From 1 April 2012||From 1 April 2013||From 1 April 2014|
|£300,000 or less||Small profits rate||20%||20%||20%||20%|
|Above £300,000||Main rate||26%||24%||23%||21%|
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 (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.
Companies involved in oil rights or extraction
There are different rates for companies which make profits from oil extraction or oil rights in the UK or UK continental shelf. These are known as ‘ring-fenced’ companies.
|Profits £300,000 or less (small profits rate)||19%|
|Profits above £300,000 (main rate)||30%|
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
- Marginal Relief if your company’s profits are between £300,000 and £1.5 million
- 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