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Corporation Tax Part 5

29th July 2011

Paul from Michael Paul Accountants Northamptonshire completes a series of articles regarding Corporation Tax.  This is part 5 the final article and explains Corporation Tax financial years and Corporation Tax rates.

For Corporation Tax purposes the tax year (known as the ‘financial year’ or ‘fiscal year’) runs from 1 April to 31 March.  This is different from the tax year for individuals which runs from 6 April to 5 April.

The rates of Corporation Tax and the various reliefs, allowances and credits are set by the Chancellor in the Budget each year.

There are two rates of Corporation Tax

  1. The lower rate – known as the ‘small profits’ rate
  2. The upper rate – known as the ‘full’ or ‘main’ rate

The rates of Corporation Tax for the financial year starting on 1 April 2011 are:

  • The small profits rate – 20%
  • The main rate – 26%

There is also a sliding scale between the lower and upper rates known as ‘Marginal Relief’ so that if a company’s profits fall between the lower and upper rates, the effective rate of Corporation Tax paid rises gradually.

The Marginal Relief limits for the financial year starting on 1 April 2011 are:

  • Lower limit – £300,000
  • Upper limit – £1,500,000

If a company’s accounting period does not run from 1 April to 31 March then the taxable profits are apportioned between the two financial years in the accounting period on a time basis.

At Michael Paul Accountants Kettering, Corby, Northampton and Market Harborough are conveniently located near to our premises in Lamport although we have clients from all over the UK.  We are a firm of Chartered Certified Accountants ensuring you receive a professional and competent service at all times.  We specialise in small businesses, medium sized businesses, sole traders, partnerships and individuals who have to file a tax return.

If you need any advice regarding Corporation Tax or any other accounting or taxation matters please don’t hesitate to contact us.


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