Corporation Tax Rates

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

Calculating Corporation Tax Pro-Rata

The UK government’s financial year goes from April 1st to March 31st. Company financial year starts often differ from this though, in which case annual taxable profits are broken down into two tax periods with corporation tax allowances, thresholds and rates calculated on a pro rate basis.

Corporation tax is levied on the taxable profit not the net pre-tax profit shown in the profit and loss or net income statement. The best way to understand how this works is to take a look at the Figurewizard sample corporation tax forecast which illustrates a step-by-step breakdown of the process.

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% 17%

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 liquidity and cash flow, which is why accurate forecasts for these are essential for any business plan.

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.

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.

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