Charge to corporation tax

By Tolley

The following Owner-Managed Businesses guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Charge to corporation tax
  • Which types of entity are within the charge to corporation tax?
  • Residence
  • Chargeable accounting periods (CAPs)
  • Change in accounting period
  • Duty to give notice of chargeability to corporation tax
  • Corporation tax computations

Whether an entity is within the charge to corporation tax depends on the type of entity and its residence.

Which types of entity are within the charge to corporation tax?

Corporation tax is charged on any corporate body or unincorporated association.

This includes the following types of entity:

  • limited companies (including companies limited by guarantee)
  • unlimited liability companies
  • members’ clubs
  • political associations
  • trade associations

The following types of entity are not within the charge to corporation tax:

  • partnerships
  • Limited Liability Partnerships (LLPs)
  • local authority associations
  • local authorities

A company is basically anybody which has been incorporated and a company will be denoted with the terms Ltd (limited) or plc (public limited company). An unlimited company will not have such letters at the end of its name. There are different ways in which a company can be incorporated, but the method does not matter for tax purposes. Usually a company will be registered at Companies House.

EU regulations permit the formation of a Societas Europaea (SE), a European company. The SE will be subject to the tax rules of the country in which it is resident.

CTA 2009, ss 2, 1319

The term ‘unincorporated association’ is not defined in the legislation. It has been held that an unincorporated association is an organisation which has rules that identify in whom the control of it and its funds vest and in which two or more persons are bound together for some common purpose or purposes (not being business purposes) by mutual undertakings, each having mutual duties and obligations.

See also Simon’s Taxes D1.104 (subscription

More on Corporation tax computations: