Corporation Tax

2. How Much Tax?

The rate at which tax is paid depends on the level of the company's profits, with lower profits taxed at a lower rate. But there are provisions to prevent companies from splitting themselves up to reduce tax charges (see 2.2).

2.1 There are two corporation tax bands in the tax year 2008/09:

If your profits fall between £300,000 and £1.5 million, you are eligible for marginal relief. This is designed to ease the transition from one rate to the next. The limits are reduced for companies belonging to groups.

The small companies' rate will be increased to 22 per cent in 2009/10.

2.2 Where there are several companies under common control the above limits will be split between them, unless it can be proved that they are not carrying on a trade or business.