Corporation Tax rates

Rates for financial years starting on 1 April
Rate 2010 2011 2012 2013
Small Profits Rate 21% 20% 20%
Lower limit £300,000 £300,000 £300,000
Upper Limit £1,500,000 £1,500,000 £1,500,000
Standard fraction 7/400 3/200 1/100
Full rate 28% 26% 24% 23%
Special rate for unit trusts and OEIC 20% 20% 20%

The main rate of Corporation Tax (also called the full rate) applies when profits (including ring fence profits) are above £1,500,000, or where there is no claim to another rate, or where another rate does not apply.

Where companies augmented profits exceed the lower limit but do not exceed the upper limit, the charge to corporation tax on the chargeable profits is reduced by an amount calculated in accordance with the following formula as stipulated in the legislation:

F x (U – A) x N / A

Where:

  • F = Standard fraction – this is also the marginal rate when expressed as a percentage;
  • U = Upper limit;
  • N = The total taxable profits;
  • A = Augmented profits i.e. taxable profits plus non group franked investment income;