Corporation Tax Rates

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

Rates and Thresholds

A list of rates and thresholds for UK corporation tax from 1971. From 2015 differential rates of tax for small and large profits respectively were scrapped. Profits of all sizes are now taxed at the same rate.

Forecasting Corporation Tax

These rates are the ones used by Figurewizard to calculate the forecast corporation tax charge once it has calculated the taxable profit 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 - 17%  

Corporation Tax Payable from 2005

The rate of tax is not the only factor to determine the size of the corporation tax bill. For example first year capital allowances which have fluctuated wildly in recent years make a significant difference when calculating taxable profits.

The principal fixed assets of any business will be what are known as main pool assets. These include plant & machinery, office equipment, fixtures, fittings and furnishings and commercial vehicles (but not company cars).

They attract a 100% first year allowance up to an annual upper limit which has been relatively high for some years (e.g. £200,000 in 2018). It is therefore likely that the average SME will have regularly written all of them off against taxable profit in their first years of ownership.

Examples of this can then be viewed in detail showing step-by-step calculations in the screen for the corporation tax forecast to arrive at the final figure for corporation tax payable as shown in the profit and loss forecast.

0% Starting Rate of Corporation Tax

Introduced in 2000 the "starting" rate of tax was principally targeted at small start up enterprises. 

The 0% rate for taxable profits not greater than £10,000 was a constructive concession for such businesses; enabling them to retain working capital and net cash flows in order to support expansion. Despite its importance in seeding new business activity and jobs the then Chancellor Gordon Brown unaccountably scrapped this from 2005.

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.

In his 2016 Autumn budget Chancellor Phillip Hammond retained the projected rates of corporation tax previously announced by George Osborne - e.g. 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.

FAQs
The Truth about Monarch Airlines Labour's Spending over 10 years from 2000 Business Planning and Forecasting: What to Look For. 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 Depreciation What is Business Operating Activity What are Fixed Assets