Millhouses Accountancy Ltd

Millhouses Accountancy

2nd Floor, The Portergate

257 Ecclesall Road, Sheffield S11 8NX

Tel: 0114 345 0960

Mobile: 07450 989048

Email: info@millhouses-accountancy.co.uk

 
Accountancy practice in Sheffield

Corporation Tax Information & Advice

What is Corporation Tax?

Corporation Tax is a tax on the taxable profits of limited companies and some other organisations including clubs, societies, associations, co-operatives, charities and other unincorporated bodies.

Taxable profits for Corporation Tax include :

  • Profits from taxable income such as trading profits and investment profits (Not dividend income, this is taxed differently).
  • Capital Gains (known as Chargeable Gains for Corporation Tax Purposes).

Corporation Tax financial years

For Corporation Tax the tax year is called the financial year or fiscal year and runs from 1 April to 31 March.  This differs to the income tax year or year of assessment which runs from 6 April to the following 5 April.

Corporation Tax rates

For the financial year commencing 1 April 2015 the Corporation Tax rate for company profits is 20%.  From 1 April 2015 this rate was unified to apply to both small companies (those with profits up to £300,000) and large companies (those with profits above £1.5 million). This removes the need for the associated companies rule.  The marginal rate of Corporation Tax will disappear. 

Prior to 1 April 2015 there were two rates of Corporation Tax, the lower rate, known as the small profits rate (aimed at small companies) and the upper rate, known as the full rate or main rate (aimed at large companies).  For the financial year commencing 1 April 2014 the small profits rate is 20% whilst the full rate is 21%.  During this year the small profits rate may be claimed by companies whose taxable profits do not exceed £300,000.  The main rate applies where taxable profits exceed this figure.  During this financial year if your company has profits which lie between £300,000 and £1,500,000 you may claim marginal relief and pay less Corporation Tax.  For the financial year commencing 1 April 2013 the small profits rate is 20% whilst the full rate is 23%.

 

When must Corporation Tax be paid?

Unlike other taxes such as Income Tax or VAT where the filing and payment deadlines are identical, this is not the case with Corporation Tax.  The deadline to pay your Corporation Tax is before the deadline to file your company tax return.  Generally a company must pay its Corporation Tax within 9 months and one day of its year end date.  A Corporation Tax Return must be filed within 12 months of the year end date.

Corporation tax information and advice