04: Tax rates

Corporation tax rates are fixed for the financial year ending each 31 March. Where an accounting period straddles this date, the profits are apportioned between the period before and after 31 March.

For the year from 1 April 2012 (i.e. the financial year 2012), the corporation tax rates are as follows:

• Companies with profits up to £1.5 million pay 20% on the first £300,000 of profits and 25% on the remainder.
• Companies with profits of £1.5 million or more pay tax at 24% on all profits.

For financial year 2013 the rate on profits of £1.5 million or more will fall to 23%.

If two or more companies are under common ownership or control, the rate limits (£1.5 million and £300,000) are divided equally between all the companies. For example, if you own two companies, each company is taxable at the 20% rate on the first £150,000 of profit. The limits are proportionately reduced for periods of less than 12 months.

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