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Tax and NI
5. Corporation Tax
Corporation tax is payable on the profit - sales less allowable expenses, plus investment income and chargeable gains (see 14) - of a limited company.
Expenses are covered in 6 to 8.
5.1 There are three corporation tax bands for the financial year 2010 (ending 31 March 2011):
profit (£)tax rate1-300,00020%300,000-1,500,00021-27%Over 1,500,00027%5.2 The top band will be reduced by 1 per cent each year over a four year period, reducing it to 24 per cent by 2014.
5.3 Companies have to calculate their own corporation tax liability.
- Companies with profits over £1.5 million pay corporation tax by quarterly instalments.
- Interest is charged on underpayments.
- The tax return can be filed later - normally up to 12 months after the accounting year end. It must be accompanied by accounts. Late returns incur automatic penalties.
5.4 Small to medium-sized companies (with profits of up to £1.5 million) continue to pay corporation tax nine months after the company's accounting year end.
Labels: Tax
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