Corporation tax

Corporation tax rates and bands are as follows:

Financial year to 31 March 2017 31 March 2016
 Taxable profits 20% 20%
 Tax credits on dividends N/A 10% 
 Loans to participators rate 32.5%  25%
 Diverted profits tax 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 period.

Beyond 31 March 2017

The rate of corporation tax will reduce from 20% to 19% in 2017 and 17% in 2020.

From 1 April 2019 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 £43.4 billion (2015/16 - £43.6 billion) from onshore corporation tax and a further £0.1 billion (2015/16 - £0.5 billion) from offshore corporation tax.