How much is company tax?

Corporation tax is the tax paid by companies on their profits. Directors pay income tax and national insurance on their salary and bonus, and shareholders pay income tax on any dividends received. 

Corporation tax rates 

The current corporation tax rates depend on your company profits and are: 

Profit banding	Corporation Tax rate
Under £50,000	19% small profits rate
Over £250,000	25% main tax rate
Between £50,000 and £250,000	25% main tax rate less marginal relief

Ring-fence companies have a slightly different rate of tax. 

How is corporation tax calculated? 

When calculating your profits for tax, this isn’t as simple as looking at your company accounts.  

Taxable profits are company turnover, less expenses and after considering corporation tax reliefs, including capital allowances. Chargeable gains are also subject to corporation tax. 

Your corporation tax bill is due nine months and one day after your company year end. For example, a company with a year-end of 31st March must pay corporation tax by 1st January. 

If your taxable profits exceed £1.5 million, you’ll need to pay your corporation tax in instalments. 

How do I pay corporation tax? 

You can pay your corporation tax by bank payment, and you’ll find more details in our comprehensive guide to corporation tax. 

How can we help? 

TaxAssist Accountants Berkhamsted can help you with your company accounts and tax return. Speak to our team today on 01494 778900 or use our online contact form. 

 

First published 6 Dec 2024

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This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.