What is Corporation Tax and what are the current rates?
If you’re a limited company based in the UK then you’re subject to paying Corporation Tax on your taxable profits. You’re also eligible if you’re a foreign company with a UK branch or office, or a club, co-operative or other unincorporated association, for e.g. a community group or sports club.
The current Corporation Tax rate is 20% – set to decrease to 19% in April 2017, and to 17% for the financial year beginning 1 April 2020.
It is your responsibility to let HM Revenue and Customs (HMRC) know that your business is liable for Corporation Tax, and to calculate the amount of tax your company owes. This amount should be paid within nine months of the end of your firm’s accounting period. You must also report if you have nothing to pay.
Large companies with taxable profits of more than £1.5 million should pay in instalments, although there are a number of exceptions to this.
Failure to tell HMRC that your business is liable for Corporation Tax, or failure to pay on time may result in a penalty. Penalties are calculated by applying a percentage to the amount of tax that you owe; that percentage will depend on the type of error, or failure, made.
We can help you with the Corporation Tax process by:
- Informing HMRC that your company is liable for Corporation Tax
- Working with you to calculate how much you owe, and ensuring that you meet your deadline
- Establishing any allowances and reliefs your business may be eligible for
If you’d like help with Corporation Tax, get in contact with WKM Accountancy Services here.