Mon - Fri 09:00-18:00 020 3540 6355

What Tax Does a Company Pay

The 2018/19 corporation tax rate is 19%. However, there is currently a downward trend for future corporation tax rates in the UK and further progressive cuts to 17% by 2020 have been announced.

WHAT TAX DOES A COMPANY PAY?

Corporation tax is what a company pays on profit it makes from:
  • doing business (‘trading profits’)
  • investment income and gains (covered in this brochure)
  • selling assets for more than they cost (‘chargeable gains’)

If the company is based in the UK, it pays corporation tax on all its profits from the UK and abroad.

There has been a steady fall in corporation tax rates which companies pay on any taxable profits. Corporation tax (main rate) was reduced:

  • from 28% to 26% in the 2011/12 tax year
  • to 24% in 2012/13
  • to 23% in 2013/14
  • to 21% in 2014/15
  • to 20% regardless of the size of company in 2015/16
  • to 19% in 2017/18

Corporation Tax rates have been steadily falling over many years, the headline rate of corporation tax being the tax due on company profits for the given accounting period. Corporate investors should be encouraged by this to consider investing any excess money (rather than holding it on deposit) as they can now expect to pay reduced rates of corporation tax on future investment gains.

CURRENT UK CORPORATION TAX LAWS AND TRENDS

Recent year-on-year reduction in corporation tax now makes investing surplus cash more attractive.

Guide to Company Owned Investments Download
Disclaimers:

The value of investments and the income they produce can fall as well as rise, you may get back less than you invested.

Tax treatment varies according to individual circumstance and is subject to change.

98% of protection insurance claims presented in 2017 were paid out upon claiming2. BOOK YOUR REVIEW UK insures pay out £9.9m every day for protection policies. BOOK YOUR REVIEW £89.35 statutory sick pay is only £89.35 per week for a period of up to 28 weeks. BOOK YOUR REVIEW £68,000 the average value of critical illness claims paid in 2016 was £68,000. BOOK YOUR REVIEW 40% Inheritance Tax (IHT) is applied on assets worth over £325,000 BOOK YOUR REVIEW 8.9 of every 1,000 opposite-sex marriages end in divorce BOOK YOUR REVIEW £33,904 is the annual cost of residential care in the UK, this can rise for more complex needs BOOK YOUR REVIEW £63,224 is the average cost of raising a child between 1 and 4 (discounting private education) BOOK YOUR REVIEW £40,000 Those who receive financial advice accrue an average of £40,000 more than their counterparts BOOK YOUR REVIEW £231,843 According to research, raising a child costs an average of £231,843 BOOK YOUR REVIEW £6,000 2017 studies show that retirement income is more than £6,000 per year higher for those who plan ahead with an adviser BOOK YOUR REVIEW 137m working days were lost due to sickness or injury in the UK during 2016 BOOK YOUR REVIEW 50% of UK citizens born after 1960 will be diagnosed with a form of cancer at some point in their lifetime according to Cancer Research UK BOOK YOUR REVIEW