Company tax rates

2015/16 to 2016/17  2014/15  2013/14  2012/13  2011/12  2010/11  
Rate  Profits £  Effective %  Effective %  Effective %  Effective %  Effective %  Effective %  Effective % 
Small  0  300,000  19  20  20  20  20  20  21 
Marginal  300,001  1,500,000  19  20  21.25  23.75  25  27.5  29.75 
Main  1,500,001 and above  19  20  21  23  24  26  28 
Fraction  n/a  n/a  1/400th  3/400ths  1/100th  3/200ths  7/400ths 
The company tax year starts on 1 April.
The main rate of CT for all nonring fence profits is 19% for Financial Year 20172019.
Finance Act 2016 has set the CT rate for Financial Year 2020 as 17%.
Companies (up to 2014/15): the marginal relief calculation
Marginal relief is given by:
(Upper limit – profits) x basic profits x fraction
profits
Upper and lower limits are reduced where:
Alternatively, you can calculate corporation tax on slices of profit using marginal rates:
Basic example:
For a company with a 31^{st} March 2012 year end and profits of £500,000, and no associated companies, and no franked investment income, the marginal relief calculation is as follows:
Tax @ 26% on £500,000 = 130,000
Less:
Marginal relief
(1,500,000 – 500,000) x 3/200 = (15,000)
Tax due = 115,000
Alternatively, you can do this calculation as follows:
First 300,000 @ 20% = 60,000
Next £200,000 @ 27.5% = 55,000
Tax due = 115,000
What is the marginal rate?
If small company’s rate is 20% and the main rate is 26%
300,000 x 20% = 60,000
1500,000 x 26% = 390,000
1200,000 x X% = 330,000
330,000/1,200,000 =27.5% marginal rate
If small company’s rate is 20% and the main rate is 25%
300,000 x 20% = 60,000
1500,000 x 24% = 360,000
1200,000 x X% = 300,000
300,000/1,200,000 =25% marginal rate
What is the marginal rate fraction?
The difference between the main rate and the marginal rate expressed as a fraction.
So 29.75%  28% = 1.75% = 7/400
28.75%  27% = 1.75% = 7/400
27.5%  26% = 1.5% = 3/200
26.25%  25% = 1.25% = 1/80
Do you like our webservice? Join hundreds of firms of accountants and Sign Up Now for FREE Nichola's SME taxupdates
Do you need Virtual Tax Partner® support?
Paying too much tax? Need assistance in preparing your tax return? Advice on a tax efficient pay package? Create a family investment company?
Any other tax problem? Contact Virtual Tax Partner ® support.