Corporation Tax

Corporation tax is a percentage of company profits. In the main it applies to limited companies. Sole traders and partnerships are assessed for personal tax and are out of bounds for this section. The percentage taxed depends on the size of the corporate profit. While that might seem simple, calculating the profit figure is not one you would recognise. As shown in the diagram below, the taxable profit is the seventh figure for profit.

Corporation tax

 

 

While we have tried to explain this as clearly as we can, there are difficult elements to judge such as “disallowable expenses”. If you look at the jargon on the short tax return (CT600) [http://www.hmrc.gov.uk/ctsa/ct600-short-2008.pdf] then it gives an idea of the complexity. Please seek advice for all but the very simplest cases.