Corporation Tax

Rates

The corporation tax rates for small and large companies will be aligned at 20% from April 2015. This will remove the need for the associated companies rule and the marginal rate of corporation tax will disappear. The rates for the three financial to 31 March 2016 have been announced as:

Year beginning 1 April: 2013 2014 2015
Small profits rate
(profits up to £300,000)
20% 20% 20%
Marginal rate
(profits in band £300,000 to £1.5 million)
23.75% 21.25% N/A
Main rate for companies
(profits above £1.5 million)
23% 21% 20%

Different rates apply to profits from North Sea oil and gas.

Banks pay a special bank levy in addition to these rates of corporation tax.

Research and Development (R&D)

Companies can claim enhanced deductions for expenditure on R&D projects at rates broadly dependent on the size of the company as follows:

  • Small and medium(SME): 225% of qualifying expenditure
  • Large: 130% of qualifying expenditure

Where the SME deduction for R&D is claimed and the company makes a loss, it can claim a cash credit from HMRC of 11% of that loss. This rate is increased to 14.5% where the R&D expenditure is incurred from 1 April 2014.

Enterprise Zones

Around 46 enterprise zones have been formed around the country to encourage investment and job formation. Businesses in some of those zones can claim 100% capital allowances on the equipment they use within the zone. The period for which those 100% allowance are available has been extended by three years to 31 March 2020.

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Corporation Tax

Under Corporation Tax Self Assessment (CTSA), the legal responsibility for correctly calculating the corporation tax liability falls on business owners. Our objective is to work closely with you as we understand the issues facing small business owners and can prepare tax returns for you. We will calculate your company's tax liability. With the increased reporting obligations, investigations policies on the part of the tax authorities and harsher penalities for non-compliance, why not let us minimise the administrative burden of compliance with current tax legislation.

Corporation Tax