Capital Gains & Other Taxes Manual - Section 1 : Corporation Tax

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1.20 General

1.21 Rate of Tax

1.22 The Tax Year

1.23 Self Assessment

1.24-29 Reserved

Part 2 : Corporation Tax

1.20 General

A company resident in the United Kingdom is chargeable to corporation tax on all its profits. A company not resident in the United Kingdom is chargeable to corporation tax only if it carries on a trade in the United Kingdom through a branch or agency, and broadly such a company is chargeable only on the profits which relate to that branch or agency.

Generally speaking, profits and income for corporation tax purposes are computed under the same schedules and rules as for income tax.

1.21 Rate of Tax

Corporation Tax is levied at a single rate on the chargeable profits of all companies, except those companies whose profits do not exceed a certain level (which is varied from time to time). These companies are charged at a lower rate known as the "small companies rate". In 2000/2001 the full rate of tax is 30% and the small companies rate is 20% with a lower starting rate of 10% for companies with profits up to £10,000 in that year.

Marginal relief is available for companies whose profits exceed the small companies limit but do not exceed an upper threshold. This relief is calculated by reducing the corporation tax liability at the full rate by a fraction of the difference between the profits and the upper threshold.

1.22 The Tax Year

Unlike an individual taxpayer a company may set its own date from which the accounting year may commence. This is known as the "Accounting Period"

1.23 Self Assessment

Self Assessment (see paragraph 1.9) was introduced for companies in the 1999/2000 tax year.

The last date for filing Corporation Tax returns is 12 months after the end of the accounting period.

1.24-29 Reserved

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