Commentary

D1.1205 Small profits rate

Corporate tax
Corporate tax | Commentary

D1.1205 Small profits rate

Corporate tax | Commentary

Small profits rate—pre 1 April 2015

D1.1205 Small profits rate

For the latest New Development, see ND.1898.

The provisions in this article were repealed with effect from 1 April 2015. From this date for non-ring fence trades there is only one 'main rate' of corporation tax (see D1.1201). Where an accounting period straddles this date it is split into two notional periods. For the small profits rate that applies to ring fence trades (see D1.1204).

Provided a company is not a close investment-holding company, or a non-exempt unauthorised unit trust (see D3.117, D8.181)1 there is a lower rate of corporation tax (the 'small profits rate' (previously the 'small companies' rate' prior to the rewrite to CTA 2010)) for a UK resident company with 'augmented profits' below £300,0002 ('the lower limit'), as follows:

Financial yearSmall profits rate per centAuthority
200921*FA 2009, s 8
201021*FA 2010, s 3
201120*FA 2011, s 6
201220*FA 2012, s 7
201320*FA 2013, s 5
201420*FA 2014, s 6
* The rate for small companies with profits from oil extraction and oil rights in the UK and the UK Continental Shelf ('ring fence profits') remains at 19%.

Close investment-holding companies pay corporation tax at the main rate regardless of the level of their profits, see D3.117.

Augmented profits comprise the company's adjusted taxable total profits and any franked investment income that is not excluded under the rules described below.

A company's adjusted taxable profits are its profits chargeable to corporation tax as if no part of its chargeable gains and

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