Below are the current Corporation Tax rates. If a company is part of a group or has associated companies, the profits limits may be reduced (consult the Inland Revenue for more information).
* Marginal relief eases the transition from the small companies' rate for companies with profits between £300,001 and £1,500,000. The fraction used in the calculation of this marginal relief will be 1/40.
What Records do I Need
In order for you to calculate your corporation tax, you must keep a record of your income and expenditure: this will require you to keep bills, invoices, receipts, etc so that you can prove any figures that you state. You should keep all records for a period of 5 years after submitting your corporation tax figure to the Inland Revenue.
Calculating Corporation Tax
Using the above table, you should calculate your corporation tax by corresponding your profit figure with the relevant tax rate: for most small businesses, this figure is likely to be below £300,000 and is therefore subject to 20% tax.
It should be noted that profits below £10,000 are no longer (since 31st March 2006) free from Corporation tax.
Late Payment Interest
The Inland Revenue charge interest on the late payment of Corporation Tax. Visit their
interest charges page for more details.
