In preparation for the Budget on March 23rd, we are publishing a series of posts from our Accountancy team, detailing the changes that will come into effect from April.
Small Profits Rate
This used to be known as the Small Companies Rate and is applicable to those companies whose profits do not exceed £300,000. For the last few years Corporation Tax has been payable at 21%. From April 1, this will be reduced to 20%.
Main Rate of Corporation Tax
The Main Rate applies to companies making a profit of £1,500,000 and over. Like the Small Profits Rate the amount of Corporation Tax you pay will be going down by a percentage. For the last few years it has remained at 28%. From April 1, you will pay 26% tax on company profits.
Marginal Relief rates
For those companies whose profit levels are between £300,000 and £1,500,000, you qualify for Marginal Relief. It basically works as a sliding scale where you have to calculate how much Corporation Tax you should pay. HMRC provides a useful online tool for working out your liability, which you can access on this link.
The amount you pay will be affected by the change to the Main Rate – so, keep that in mind when calculating your tax liability.
Changes to filing and payment
Another thing to remember is that there will be important changes to Corporation Tax filing and payment from April 1. All Corporation Tax payments will have to be made electronically, and all company tax returns must be filed online for accounting periods ending after 31 March 2010.
Crunch online accounting’s team of expert accountants are on hand to produce your annual returns and submit every piece of paperwork, including VAT & Corporation Tax.Find out more.