Corporation Tax rates
The rate of Corporation Tax you pay depends on how much profit your company makes.
Rates for Corporation Tax years starting 1 April
There are different rates for ring fence companies
| Rate | 2015 | 2014 | 2013 | 2012 |
|---|---|---|---|---|
| Small profits rate(companies with profits under £300,000) | – | 20% | 20% | 20% |
| Main rate(companies with profits over £300,000) | – | 21% | 23% | 24% |
| Main rate (all profits except ring fence profits) | 20% | |||
| Marginal Relief lower limit | – | £300,000 | £300,000 | £300,000 |
| Marginal Relief upper limit | – | £1,500,000 | £1,500,000 | £1,500,000 |
| Standard fraction | – | 1/400 | 3/400 | 1/100 |
| Special rate for unit trusts and open-endedinvestment companies | 20% | 20% | 20% | 20% |
From 1 April 2015 there will be a single Corporation Tax rate of 20% for non-ring fence profits.
Use the Marginal Relief calculator to work out how much Marginal Relief you can claim on your Corporation Tax for profits before 1 April 2015.
The government has set the Corporation Tax main rate (for all profits except ring fence profits) at 20% for the year starting 1 April 2016. At Summer Budget 2015, the government announced legislation setting the Corporation Tax main rate (for all profits except ring fence profits) at 19% for the years starting the 1 April 2017, 2018 and 2019 and at 18% for the year starting 1 April 2020.
Ring fence companies
There are different Corporation Tax rates for companies that make profits from oil extraction or oil rights in the UK or UK continental shelf. These are known as ‘ring fence’ companies.
Ring fence companies can claim Marginal Relief on profits between £300,000 and £1.5 million.
| Rate | 2015 | 2014 | 2013 | 2012 |
|---|---|---|---|---|
| Small profits rate(companies with profits under £300,000) | 19% | 19% | 19% | 19% |
| Main rate(companies with profits over £300,000) | 30% | 30% | 30% | 30% |
| Ring fence fraction | 11/400 | 11/400 | 11/400 | 11/400 |
Corporation Tax on chargeable gains
If you sell or dispose of a business asset, you’ll need to pay Corporation Tax on any profits (or ‘chargeable gains’).
When working out your chargeable gain, you can use Indexation Allowance Rates to work out the value of the asset at today’s prices.