UK Corporation Tax Rates and Allowances
| Financial year 2005-06 (£) | Financial year 2006-07 (£) | |||
| Starting rate 0% | 0 - 10,000 | Starting rate 0% | - | |
| Marginal relief | 10,000 - 50,000 | Marginal relief | - | |
| Small companies' rate 19% | 50,001 - 300,000 | Small companies' rate 19% | 0 - 300,000 | |
| Marginal relief | 300,001 - 1,500,000 | Marginal relief | 300,001 - 1,500,000 | |
| Main rate 30% | 1,500,001 or more | Main rate 30% | 1,500,001 or more | |
The corporation tax main rate is 30%. However, in the March 2007 budget it was announced that this rate is to drop to 28% in April 2008.
The small companies' rate is 19 per cent for companies with taxable profits up to £300,000. This will rise to 22% by April 2009.
Marginal relief eases the transition from the starting rate to the small companies' rate for companies with profits up to £50,000. The fraction used in the calculation of this marginal relief will be 19/400. Marginal relief also applies to companies with profits between £300,000 and £1,500,000. The fraction used in the calculation of this marginal relief will be 11/400.
The profits limits may be reduced for a company which is part of a group or has associated companies. The lower rates and marginal reliefs do not apply to close investment holding companies.
There are many accounting software packages in the UK that can help you automate the preparation of corporation tax returns. Here are some featured providers:
