Corporation tax and rates

integro Contractor Tax

What is corporation tax?

Corporation tax is payable on the taxable profits of limited companies. Taxable profits are made up of profits from trading and most investments, along with any ‘chargeable gains’ made by the company, which is the term used when a company makes capital gains.

As a contractor, freelancer, or consultant, your company profit is, broadly speaking, the company income before VAT less company expenses.

For companies based in the UK, corporation tax is applied to all taxable profits, no matter where in the world the profit was made.

What are the corporation tax rates?

Historically there have been been two rates of corporation tax: for smaller companies with a profit of £300,000 or less the ‘small profits rate’ is applied, at 20% for the 2014/15 tax year; and for companies with a profit of £1.5 million or more, the main rate of corporation tax is applied, at 23% for the 2014/15 tax year.

For companies with a profit between these two limits a sliding scale of corporation tax is worked out so that ‘marginal relief’ is given. These companies will therefore pay more than 20% but less than 23%, with the exact amount depending on their profit.

However, from the 1st of April 2015 there will be one unified rate of corporation tax and this will be at 20%.

For small companies this will not have an impact but larger companies will find that the profit from acounting periods spanning the two tax years will be apportioned over two corporation tax rates.

What does a company need to do for corporation tax?

A company has several obligations with regards to corporation tax and the main points are as follows:

A company must tell HMRC within 3 months of starting to trade that it is liable to corporation tax.
Corporation tax must be paid by nine months and a day following the end of the company’s corporation tax period.
A corporation tax return must be submitted by 12 months after the end of the company’s corporation tax period.
Helping you to meet your company’s corporation tax obligations is part of Integro Accounting’s fixed fee service.

Why Integro Accounting?

Integro Accounting is the UK’s only specialist provider of fixed fee, limited company accountancy services for contractors, consultants and freelancers that was established to an award winning standard – our Practice Manager, Maria Williams, won The British Accountancy Awards’ ‘Accountant of the Year’ in 2011.

We were set up with the vision of providing a service that is the ultimate for the dynamic, busy professional of today in a language you understand.

Integro Accounting have designed a bespoke service for the contractor who is always on the go; never forgetting that one size will never fit all.

The relationship you have with your accountant is the most important factor in our service which is why we will always offer unlimited contact with your own personal accountant; whether that contact is via the phone, email or face to face.

We have our 3 offices located in London, the South-West and on the Bedfordshire and Buckinghamshire border. There are also meeting locations in many of the major cities and towns across the Home counties, South-West and South Wales, all conveniently placed so that you never have to travel far to meet your accountant.

If you have any questions about contracting or would like to find out more about how Integro Accounting can help you and business please call Christian on 01525 303984, email christian@integroaccounting.com or request a callback.