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Corporation Tax in United Kingdom

Definition of Corporation Tax

In accordance with the work A Dictionary of Law, this is a description of Corporation Tax : A tax on the worldwide profits of limited companies and certain other bodies resident or trading in the UK. Corporation tax started on 6 April 1966 (before this date companies paid income tax and profits tax). It applies to all bodies corporate and unincorporated associations, including limited companies, building societies, cooperative societies, unit trusts, and investment trusts, but excluding local authorities.

The tax is based on the profits shown in the company’s audited accounts after adding back certain nonallowable deductions, which include depreciation of *machinery and plant, provisions for doubtful debts, and political contributions. However, *capital allowances are deductible for corporation tax purposes, as are losses carried forward from earlier years. From April 1973 until April 1999 a company was required to pay *advance corporation tax on its distributed profits, which was offset against its corporation tax liability. From 1999 larger companies pay corporation tax in instalments. Chargeable gains (See capital gains tax) count as profits for corporation tax purposes but losses can be offset against any gains. The rates of corporation tax are (for 2001-02): 10% for profits up to £10,000; a 20% small companies rate for profits from £50,000 to £300,000, and a 30% main rate for profits over £1,500,000. There are sliding scales (marginal relief) for amounts between the different rates.

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(2015, 04). Corporation Tax lawi.org.uk Retrieved 03, 2021, from https://lawi.org.uk/corporation-tax/

04 2015. 03 2021 <https://lawi.org.uk/corporation-tax/>

"Corporation Tax" lawi.org.uk. lawi.org.uk, 04 2015. Web. 03 2021. <https://lawi.org.uk/corporation-tax/>

"Corporation Tax" lawi.org.uk. 04, 2015. Accesed 03 2021. https://lawi.org.uk/corporation-tax/

Agostino Von Hassell, 'Corporation Tax' (lawi.org.uk 2015) <https://lawi.org.uk/corporation-tax/> accesed 2021 March 2

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Schema Summary

  • Article Name: Corporation Tax
  • Author: Agostino Von Hassell
  • Description: Definition of Corporation Tax In accordance with the work A Dictionary of Law, this is a description of Corporation Tax : A [...]

This entry was last updated: November 6, 2020

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