Corporation Tax Rates

This list shows UK the history of corporation tax rates and thresholds from 1971 to 2020.

The Taxable Profit

Corporation tax is charged to the taxable profit of incorporated companies (i.e. limited companies) not on the net pre-tax profit as shown in the profit and loss or net income statement.

To arrive at taxable profit, some charges are added back as non-tax deductible while others are substituted for allowances. That is one of the reasons why, in its first year the sample Profit and Loss Forecast displayed on this site shows corporation tax charge as 14.4% of pre-tax profits - not 19%.

Calculating Corporation Tax Pro-Rata

The UK government’s financial year runs from April 1st to March 31st. 

Most companies financial year will differ from this though, in which case annual taxable profits have to be broken down into two tax periods with corporation tax allowances, thresholds and rates calculated on a pro rate basis.

Figurewizard automatically calculates taxable profit, applying the corporation tax charge to all of the forecasts and calculators simply from your own forecasts for sales, margin overheads and so on. To see how it is calculated including capital allowances and the tax  take a look at the sample Corporation Tax Forecast.

UK Corporation Tax Rates and Thresholds from 1971
 

 From  April 1st. Starting Profit Limit Small Rate Profit Limit Starting Rate of Tax Small Profit Rate of Tax Standard Rate of Tax
1971 - - - 40% 40%
1972 - - - 40% 40%
1973 - 25,000 - 42% 52%
1974 - 25,000 - 42% 52%
1975 - 30,000 - 42% 52%
1976 - 40,000 - 42% 52%
1977 - 50,000 - 42% 52%
1978 - 60,000 - 42% 52%
1979 - 70,000 - 40% 52%
1980 - 80,000 - 40% 52%
1981 - 90.000 - 40% 52%
1982 - 100,000 - 38% 52%
1983 - 100,000 - 30% 50%
1984 - 100,000 - 30% 45%
1985 - 100,000 - 30% 40%
1986 - 100,000 - 29% 35%
1987 - 100,000 - 27% 35%
1988 - 100,000 - 25% 35%
1989 - 150,000 - 25% 35%
1990 - 200,000 - 25% 34%
1991 - 250,000 - 25% 33%
1992 - 250,000 - 25% 33%
1993 - 250,000 - 25% 33%
1994 - 300,000 - 25% 33%
1995 - 300,000 - 25% 33%
1996 - 300,000 - 24% 33%
1997 - 300,000 - 21% 31%
1998 - 300,000 - 21% 31%
1999 - 300,000 - 20% 30%
2000 10,000 300,000 10% 20% 30%
2001 10,000 300,000 10% 20% 30%
2002 10,000 300,000 0% 19% 30%
2003 10,000 300,000 0% 19% 30%
2004 10,000 300,000 0% 19% 30%
2005 10,000 300,000 0% 19% 30%
2006 - 300,000 - 19% 30%
2007 - 300,000 - 20% 30%
2008 - 300,000 - 21% 28%
2009 - 300,000 - 21% 28%
2010 - 300,000 - 21% 28%
2011 - 300,000 - 20% 26%
2012 - 300,000 - 20% 24%
2013 - 300,000 - 20% 23%
2014 - 300,000 - 20% 21%
2015 - N/A - 20% 20%
2016 - N/A - 20% 20%
2017 - N/A - 19% 19%
2018 - N/A - 19% 19%
2019 - N/A - 19% 19%
2020 - N/A - 19% 19%

Forecasting Corporation Tax

Figurewizard forecasts will apply these rates of corporation tax based upon your finanical year start date. 

The value of corporation tax payable and subsequent payment will have a significant effect on the Liquidity and Cash Flow Forecast, which is why accurate forecasts for these are essential for any business plan.

Reduced 2020 Corporation Tax Rate of 17% Scrapped

In his 2016 Autumn budget Chancellor Phillip Hammond retained the projected rates of corporation tax previously announced by George Osborne - e.g. That the tax will be reduced to 17% by 2020.

This commitment to the new unified tax rate was reaffirmed in the Spring budget of March 2017 but on the 18th November Boris johnson announced that the 17% rate would not be introduced for 2020. The rate is set to remain at 19%..

Taxable Profit

When forecasting using Figurewizard you will see that the tax as a percentage of pre-tax profit will differ from the rate or rates applicable.

That is because the taxable profit is different. For example depreciation is not accepted as a charge, which is substituted for by capital allowances. Similarly "provisions" such as for bad debts are excluded because no explicit transfer or commitment to transfer cash is involved.

Marginal Relief

Up to 2015 a company with taxable profits that were greater than £300,000 and not more than £1,500,000 were entitled to claim additional tax relief by way of marginal relief. As corporation tax for all company profits regardless of size is now unified, marginal relief now no longer applies.

FAQs
Lockdown Recovery: Forecasting Profits, Cash and Finance. How to Apply for Business Interruption Scheme with Figurewizard How to calculate liquidity and short-term liquidity How to calculate markup and margin The Truth about Monarch Airlines Labour's Spending over 10 years from 2000 How to make profits and not run out of cash Credit Checking - How to Read Micro or Short Form Accounts Amortisation of Arrangement Fees for Long Term Loans BHS Profits Performance 2010 - 2014 BHS profits, liquidity and cash flows 2009 - 2014 How to Calculate a Free Cash Flow Forecast Campari: How to apply for a bank business loan What are Current Liabilities What are Current Assets Late Payers and Cash Flow What is Operating Cash Flow What is Working Capital How to Read a Balance Sheet Business Planning Cash Flow Calculator Short Term Liquidity Business Liquidity Corporation Tax is not Calculated on Net Profit Small Business Corporation Tax Cash Flow Calculator Using Figurewizard - VAT Using Figurewizard - Sales by Month Using Figurewizard - HP or Instalment Plan Budgets Using Figurewizard - How the budgeted cash flow forecast is calculated Using Figurewizard - Fixed Asset Budgets Using Figurewizard - Calculate Purchase of Goods Using Figurewizard - Forecasting Payments to Suppliers Using Figurewizard - How to Forecast Cash Collection Solvency and the Balance Sheet Property in the Balance Sheet Why Equity is a Liability Asset Management and Liquidity Selling Fixed Assets Contracts: Invitation to Treat What is Deferred Income Loss on the Sale of Fixed Assets Calculating Gross Profit Margin Profit and Loss Statement What is Operating Profit What is Net Operating Revenue What is Equity Profit on the Sale of Fixed Assets How Taxable Profit is Calculated What are Operating Overheads Overheads - Provisions How Depreciation is Calculated What is Business Operating Activity What are Fixed Assets Liquidity and Cash Flow Balance Sheet Liabilities and Leases Stock or Inventory Control What is Distressed Stock or Inventory What is Interest Suspense Account Product Safety Laws What is a Bill of Exchange What is Payment at Sight What is a Pro Forma Invoice What is a Bill of Lading What is a packing note What is Demurrage Cash Flow Forecasts and Planning Factoring: Invoice Discounting and Cash Flow How Does VAT Work Figurewizard as a Sales Aid for Factoring and Invoice Discounting