HMRC internal manual

Company Taxation Manual

CTM03540 - Corporation Tax: small profits relief: no associated companies - profits exceeding the lower limit

Where in any accounting period of twelve months:

  • a company has no associated companies, and
  • its profits for the accounting period exceed the lower limit but do not exceed the upper limit (for small profits relief),

the CT charged at the full rate on its total taxable profits is reduced by an amount of relief equal to:


F x (U - A) x N ÷ A



F = the standard fraction

U = the upper limit

A = the amount of augmented profits of the accounting period (CTM03600)

N = the amount of taxable total profits (CTM03505).

CTM03520 refers to the starting rate which applied to financial years 2000 to 2005 and to which a similar marginal calculation applied.