RMH Associates
Business & Accountancy Services

Corporation Tax

Corporation Tax
Corporation tax rates and bands are as follows:
Financial Year to
Taxable profits  
First £300,000
(threshold is divided by no of associated companies)
Next £1,200,000
(threshold is divided by no of associated companies)
On profits over £1,500,00030%28%
Tax credit on dividends10%10%
Marginal relief fraction1/407/400
Ring fence profits are taxed at 30%
The small companies' rate will be 22% from 1 April 2009.
Corporation Tax Due
For small and medium sized companies
Nine months and 1 day after the end of the accounting period
For large companies
Profit threshold for quarterly instalment payments£1,500k£1,500k
Instalments - 14th day of the 7th, 10th, 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

Associated Company is defined at s13(4) of the Finance Act 2008 as one company controlling another or two companies being under common control, with s416 TA 1988 being used to determine what is control. Finance Act 2008 revises the definition solely for the purposes of SCR with effect from 1 April 2008. The new wording and subsections ensures that the rights and powers held by business partners are attributed only when "relevant tax planning arrangements have at any time had effect in respect of the taxpayer company". "Relevant tax planning arrangements" are defined as arangement which involve the shareholder or director and the partner and secure a tax advantage by virtue of greater releif under s13.