Tax and NI

5. Corporation Tax

Corporation tax is payable on the profits - business turnover less allowable expenses, plus investment income and chargeable gains - of limited companies.

5.1 There are two corporation tax bands for the tax year 2008/09:

5.2 Companies have to calculate their own corporation tax liability.

• If profits are likely to be in excess of £1.5 million, companies pay corporation tax by quarterly instalments. All other companies continue to pay corporation tax nine months after the end of the company's accounting period.
• Interest is charged on underpayments (and paid on overpayments).
• The tax return has to be filed within 12 months after the end of the accounting period and must be accompanied by accounts. Late returns incur automatic penalties.