Corporation Tax
Corporation Tax is paid on the taxable profits of limited companies and some organisations (including clubs, societies, associations, co-operatives, charities and other unincorporated bodies).
Taxable profits include:
- profits from taxable income – for example trading profits and investment profits (except dividend income which is taxed differently)
- capital gains – known as ‘chargeable gains’ for Corporation Tax purposes
If your company/organisation is based in the UK, you’ll have to pay Corporation Tax on all your taxable profits – wherever in the world those profits come from. If your company isn’t based in the UK but operates in the UK – for example through an office or branch (known to HMRC as a ‘permanent establishment’) – you’ll only have to pay Corporation Tax on any taxable profits arising from your UK activities.
A ‘small profits rate’ (previously small companies rate) can be claimed by companies with a net profit not exceeding £300,000. From 2011 the small profits rate will be 20%. The main rate of corporation tax (for companies with a net profit in excess of £300,000) is 27% for 2011. Click here for a full list of Corporation Tax rates.
An expert analysis of a business structure and advice on available allowances and refliefs can significantly reduce exposure to Corporation Tax. Contact Collective Legal Solutions to arrange a consultation with a Chartered Tax Adviser.