Every company that is based in the UK is subject to Corporation Tax on their profits. This refers to clubs and societies, trade associations, housing associations, and even co-operatives. Companies that are non-UK based can still be expected to pay Corporation Tax, if the centre of management is based in the UK.
The first thing you must do is register your company with HMRC (Her Majesty’s Revenue and Customs) and let them know that you are liable for corporation tax.
If your company is liable for corporation tax, you must calculate how much taxable profit your company made over the course of the financial year, and what is owed to HM Revenue & Customs.
Corporation tax is currently broken into two separate rates*:
- The standard rate is set at 30% (this will be reduced to 28% as of 5th April 2008), but this applies only to organisations with annual profits that total more than £1,500,000.
- For organisations with profits falling below £300,000, corporation tax will be charged at a Small Companies’ Rate of 20% (increased to 21% as of 5th April 2008).
- Between these two profit margins the Marginal Small Companies’ Relief (MSCR) applies. This offers a tapering rate that helps to make the transition from the lower to the upper rate smoother.
* Please note that these corporation tax rates change and it is important to use an accountant to ensure compliance and tax advantages happen.
TaxAssist Accountants can calculate your taxable profit as well as guide you through your corporation tax return. Our tax accountants make the process of filing your corporation tax as stress free as possible.
TaxAssist Accountants work with 25,000 small businesses so let us take away the hassle and stress which corporation tax causes to many businesses every year.
Call us now on 0800 0523 555 for further information on corporation tax or fill out our contact form.
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