Use our free Corporation Tax Calculator to estimate how much tax your UK limited company may need to pay.
Corporation Tax rates range from 19% to 25%, depending on your company’s taxable profits. Companies with profits between £50,000 and £250,000 may qualify for marginal relief, which reduces the amount of tax payable.
Our calculator helps you estimate your Corporation Tax liability and compare it with the previous 19% flat rate.
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What is Corporation Tax?
Corporation Tax is calculated on taxable profits for the company’s accounting period, which may differ from the profit shown in its accounts.
Income tax and National Insurance are paid through annual Self Assessment tax returns for the self-employed.
HMRC Corporation Tax Rates
The Corporation Tax rate of 19% has been in place since 2017, but it was 30% in 2000. The government has introduced new rates from 1st April 2023, with rates from 19% to 25% for a company’s financial year.
The lowest rate of Corporation Tax of 19% is for companies with profits under £50,000.
The highest rate of Corporations Tax of 25% is for companies with profits over £250,000.
HMRC has introduced marginal relief for a company with profits between £50,000 and £250,000. Marginal relief provides a gradual increase in Corporation Tax as the profits increase.
How is Corporation Tax Paid?
Corporation Tax is reported on a Corporation Tax Return CT600 and filed with HMRC. The deadline for the tax return is 12 months after the end of the accounting period.
The Corporation Tax liability is due nine months and one day after the end of the accounting period. If your business has a 31st March year-end, the tax must be paid by 1st January of the following year.
You can pay Corporation Tax online using the HMRC, through online banking, phone, or direct debit.
These deadlines apply to most small companies. Larger companies may need to pay Corporation Tax in instalments.
How Can a Company Reduce Corporation Tax
Companies can reduce their Corporation Tax liability by claiming allowable business expenses and tax reliefs.
One example is capital allowances on qualifying equipment, such as computers, machinery and office equipment.
For example, if a company has taxable profits of £100,000 before capital allowances and purchases £10,000 of qualifying computer equipment, it may be able to deduct the full £10,000. This would reduce its taxable profits to £90,000.
The amount that can be claimed depends on the type of asset and the capital allowance rules.
Other reliefs may be available for qualifying research and development, business losses and certain creative industry activities.
Companies should check the eligibility rules or seek professional advice before claiming reliefs
Complete guidance on Corporation Tax rates and allowances is available on the HMRC website.
How Does Our UK Corporation Tax Calculator Work?
You can use this Corporation Tax calculator to work out how much tax your company is due to pay based on the company profits before taxes.
Our limited company tax calculator will show the difference between the rate from 1st April 2023 and the previous rate of 19%. If the Company’s financial year falls across the 2 different rates, you must calculate how many days in each rate.
Enter the net profits before tax to calculate Corporation Tax.
Corporation Tax Calculator Conclusion
Our free Corporation Tax Calculator helps UK limited companies estimate how much Corporation Tax they need to pay based on their taxable profits.
The calculator uses the current rates of 19% to 25% and includes marginal relief for companies with taxable profits between £50,000 and £250,000.
The results are estimates based on a 12-month accounting period with no associated companies. Your actual tax liability may differ depending on your company’s circumstances, available allowances and tax reliefs.
To avoid penalties, always pay Corporation Tax on time. If you need further assistance understanding these rules or calculating your taxes, speak to your accountant.
See our other helpful business calculators.
