What is Corporation Tax?
Corporation Tax is a tax that is placed on the profits that are made by companies. The Corporation Tax was first established in 1965 and prior to this, companies had to pay tax on their profits at the same rate that was levied on individuals. This soon changed and profits that became taxable were decided by HMRC to be trading profits, capital gains and investment profits. Corporation tax must be paid if you are doing business as a limited company, a foreign company with one or more UK branches or a community group, a sports group or any other unincorporated association. You will also be taxed on ‘chargeable gains’ such as if you sell an asset for more than it costs, as a company. If you have are a UK based company but have offices abroad, you will have to pay corporation tax on all of your profits. If you are based abroad but have offices in the UK, you will only have to pay corporation tax on the profits made by your UK branches. You can book an appointment with an accountant or tax adviser if you need one to one help with your corporation tax.
Additional Corporation Tax Contact Numbers
|Corporation Tax Help||0844 248 2558|
|Corporation Tax Complaints||0844 248 2558|
|Customer Services||0844 248 2558|
Corporation Tax Helpline Opening Hours
|Customer Service||8:30am-11:30pm, 7 days a week|
Corporation Tax Head Office Address
|Head Office||Corporation Tax Services
HM Revenue and Customs
Reasons to call the Corporation Tax Helpline
- I want to make a complaint to HMRC about the Corporation Tax service
- I have been overcharged Corporation Tax and need to speak to someone about it
- I am unsure whether I should be paying Corporation Tax or not
- I would like to make a complaint about a particular individual at HMRC
- I think I have been undercharged Corporation Tax.
- My circumstances have changed and I am unsure whether I should be paying corporation tax or not
- I have UK offices but my business is based abroad, I want to know how much corporation tax my business owes to HMRC.
Corporation Tax Rates
The current Corporation Tax rates for company profits stands at 20%. You have an accounting period for your Corporation Tax, which can’t be longer than 12 months. You can log into your HMRC account on the government website to check the dates of your accounting period. If you have forgotten the log in details to your account, please call the corporation tax helpline. If you think the dates that you have been given for your accounting period are wrong, contact HMRC. There is now a standard 20% tax on all profits, but any profits that were made on or before the 15th April 2015 will have a different rate, depending on the size of the profits. If your profits were £300, 000 or less, you will still be at the 20% rate. If your profits were above the £300, 000 cut off mark, you will have to pay 20% corporation tax but for any profits from April 1st 2014 or before, you will have to pay 21% and from or before 1st April 2013 you will have to pay 23%. If you are still unsure about how much you owe, then do not hesitate to call the Corporation Tax helpline. £300, 000 is the main threshold for most companies paying corporation tax, but this differs slightly for associated companies (companies that control other, smaller companies) if this is the case then the threshold is split between the companies. If you have been given the dates for your accounting period and find that more than one rate applies during the time stated then, eg. if the year changes then there might be two different rates that you need to pay. Call the helpline again if you are unsure.
Corporation Tax Calculator
You can find Corporation Tax calculators online and should be used by limited company’s to calculate how much Corporation Tax they owe as a company. You will have to enter your company’s profits and the year that they are from, and the calculator will tell you the rate at which you should be paying your Corporation Tax. You will receive a letter from HMRC when you owe Corporation Tax. If you feel that you have been sent this letter incorrectly, or you are being asked to pay at the wrong rate, please call the helpline so that your issue can be resolved.
Corporation Tax Allowances and Relief
When preparing company accounts, you can deduct tax from your profits before they are filed for tax. Profit deductions may include the costs of running your business but anything that you or your employees get personal use from must be treated as a benefit, for example, a company car. You can also claim capital allowances on a number of things which will provide you relief from corporation tax. These are; equipment, machinery and business vehicles. You can choose to deduct the full amount or some of the cost of the items out of your profits before your profits are submitted for Corporation Tax deductions. It is important to work out the value of an item before you deduct it from your profits. The value of the item usually stands at what you paid for it if you bought it when you were already running your business but if you owned it before you can usually value an item at what you would sell it at. You can also make claims on your profits from different business costs, not just assets. This means you can deduct pre-tax the cost of day to day runnings of your business or any interest that you might have to pay for buying assets. Renovating business premises can also be classed as a capital allowance and something a limited company can deduct from their profits, pre-tax.
How is Corporation Tax calculated?
Corporation Tax depends on how much profit a company has made. It is all taxed at a 20% rate, so the higher the profit, the higher the tax charge will be. There are Corporation Tax calculators online to help you in calculating how much you owe.
When is my Corporation Tax due?
Corporation Tax deadlines depend purely on what of your profits are taxable. If you have taxable profits of up to 1.5 million you must have paid your Corporation Tax by 9 months and 1 day after your accounting period has ended. Anything above this is to be paid in instalments. If payments are not made by the deadline (you will be given a specific deadline date) then your company may be charged interest by HMRC. There are a range of different ways that you can pay your Corporation Tax, the quickest being by online banking if your deadline is less than a day away. If you want to set up a direct debit to HMRC you can also do this to ensure your payments are made on time.