The following Corporation Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
From 1 April 2023, the rate of corporation tax depends on the level of augmented profits of a company and is based on a comparison of the company’s augmented profits against the corporation tax thresholds of £50,000 (the lower limit) and £250,000 (the upper limit). The rate of corporation tax is 19% if profits do not exceed the lower limit and 25% where profits are greater than the upper limit. Where a company’s profits fall between the lower and upper limits, it will pay tax at 25% but be entitled to marginal relief.
The upper and lower limits are reduced where there are ‘associated companies’ ― in such cases, the profit limits are divided equally among all of the associated companies. It is also these revised limits that are used in any marginal relief calculation. See Example 1 for anillustration.
For more information on the meaning of augmented profits, see the Computation of corporation tax guidance note.
As well as affecting the corporation tax rates that apply, there are other instances that are impacted by the associated companies test. These include small claims treatment under the patent box regime, the capital allowances long life assets rules and the quarterly instalments payment regime.
Prior to 1 April 2023, different rules applied. There was only one rate of corporation tax regardless of the level of profits of the company or the number of associated companies. In addition, a simpler 51% group company test applied to the other corporation tax areas (such as the quarterly instalment payments regime) instead of the associated companies test. A company that has a period of account that straddles 1 April 2023 is deemed to have two separate accounting periods ― one ending 31 March 2023, where the related 51% group companies rules apply and a second period, from 1 April 2023 to the company’s accounting period end, which will use the associated companies test.
For information on the other
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
IntroductionUK tax must be withheld on UK payments including:•interest•royalties•rental incomeWithholding tax may be reduced under double tax treaties (DTT) or European directives, both of which may be subject to making a formal claim.This guidance note outlines the rules for UK withholding tax, and
Summary of capital allowances on carsThe current capital allowance rates applicable to cars are as follows:Pool typeDescription of carRateLegislationMain rate poolNew and unused cars with CO2 emissions over 50g/km but not more than 110g/km (to be reduced to 50g/km and below from April 2021)18%CAA
Normal due dateSmall companies (including marginal relief companies) are required to pay all of their corporation tax ― nine months and one day ― after the end of the chargeable accounting period.For example, where a chargeable accounting period ends on 31 December 2018, the due and payable date for
This guidance note provides details of quarterly instalment payments (QIPs) for corporation tax purposes and which companies need to pay their tax liabilities in this manner.Generally, corporation tax is payable nine months and one day after the end of the relevant accounting period. However, large
To view our latest tax guidance content, sign in to Tolley Guidance or register for a free trial.