Corporation tax

Corporation tax rates and bands are as follows:

Financial year to 31 March 2016 31 March 2015
Taxable profits    
 All profit 20% 21% 
 First £300,000 N/A  20%
 Next £1,200,000 N/A 23.75%
 On profits over £1,500,000 N/A 23%
 Tax credits on dividends 10% 10%
 Marginal relief fraction N/A 1/400
 Loans to participators rate 25% 25%

Corporation tax payable

For small and medium sized companies

  • Nine months and one day after the end of the accounting period

For large companies

  • Instalments
    • The 14th day of the seventh, tenth, 13th and 16th months after the commencement of a 12 month accounting period
  • Balance
    • Nine months and one day after the end of the accounting periodBeyond 31 March 2016

The rate of corporation tax will reduce from 20% to 19% in 2017 and 18% in 2020.

From 1 April 2017 companies with taxable profits of £20 million or more will be required to pay corporation tax in quarterly instalments in the third, sixth, ninth and twelfth months of their accounting period. The £20 million threshold will be divided by the number of companies in the group.

Did you know?

The Treasury is expecting to raise £42.5 billion (2014/15 - £40.8 billion) from onshore corporation tax and a further £0.6 billion (2014/15 - £2.1 billion) from offshore corporation tax.