UK Corporation Tax rate 2016/17

(Last updated 12/04/16)

20%

Profit below £300,000

20%

Profit above £300,000

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What is Corporation Tax?

Corporation Tax is paid at the rates that applied in your company's accounting period for Corporation Tax. If more than one rate applies, calculate how much is due based on the number days each rate applied, for example, 45 days at the rate for the 2014/15 accounting year and 320 days at the rate for the 2015/16 accounting year. You can find out your accounting period on your company's online account.

Find out more about Corporation Tax on our accounting glossary.

Example: How Hannah pays Corporation Tax

Hannah is the company director of WordPress Developers Ltd, which has an accounting year that is the same as the tax year. In order to work out her Corporation Tax bill she needs to know three things:

  • The business’s total accounting profit for the year: £42,301
  • Costs that aren’t allowable for tax relief (e.g. the cost of entertaining clients): £872
  • Non day-to-day running costs that are allowable for tax relief (e.g. the cost of a new laptop): £650

First, Hannah must work out the amount that the company must pay tax on (known as the taxable profit):

£42,301 + £872 - £650 = £42,523 taxable profit

With the Corporation Tax rate at 20%, WordPress Developers Ltd is due to pay:

£42,523 x 20% = £8,504.60 in Corporation Tax

How to pay your Corporation Tax bill

Online or telephone banking (Faster Payments) Same or next day
CHAPS Same or next day
Bacs Three working days
Debit card Three working days
Credit card (1.5% charge) Three working days
Existing Direct Debit Three working days
New Direct Debit Five working days
At the Post Office Three working days
At your bank or building society Three working days

Note: For most payments you’ll need your 17-character Corporation Tax payslip reference for the accounting period you’re paying. This can be found on the payslip that HMRC sent you after you submitted your return or through the company’s HMRC online account.

Online or telephone banking: If you’re paying by online or telephone banking (Faster Payments, CHAPS or Bacs) details for the HMRC bank account you should pay your tax bill into can be found here.

Debit or credit card: If you are paying by debit or credit card you can do so by following the links from your HMRC online account.

Direct Debit: You can set up a Direct Debit from your HMRC online account. Make sure you do this at least three working days before you submit your return to ensure the payment is taken from your account in time. Once the Direct Debit is set up, HMRC will collect payments from your account within three working days.

At the Post Office: At the Post Office you can pay a maximum of £10,000 by debit card, cash or cheque made payable to ‘Post Office Ltd’. If your bill is over £10,000 you’ll need to use an alternative payment method. You’ll need the payslip that HMRC sent you after you submitted your Corporation Tax return.

At your bank or building society: At your bank or building society you can pay your Corporation Tax bill by debit card, cash or cheque made payable to ‘HM Revenue and Customs only’ followed by your 17-character corporation tax payslip reference. Again, you’ll need the payslip that HMRC sent you after you submitted your Corporation Tax return.

Previous Corporation Tax rates

2015-16
Profit below £300,000 20%
Profit above £300,000 20%
2014-15
Profit below £300,000 20%
Profit above £300,000 21%
2013-14
Profit below £300,000 20%
Profit above £300,000 23%
2012-13
Profit below £300,000 20%
Profit above £300,000 24%

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