1. 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.

There are different rates for ‘ring fence’ profits of companies involved in oil rights or extraction in the UK or UK continental shelf.

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 2016 depends on the size of the profits. Work out your profits when you prepare your Company Tax Return.

Your profits From 1 April 2016 From 1 April 2015 From 1 April 2014
£300,000 or less 20% 20% 20%
Above £300,000 20% 20% 21%

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

One company is associated with another if either:

  • one company controls the other
  • both companies are controlled by the same companies or people

This means they 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 2015 to 29 February 2016, you pay:

  • the rate for the financial year starting 1 April 2014 for 31 days (1 March to 31 March)
  • the rate for the financial year starting 1 April 2015 for 335 days (1 April to 29 February)