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Company tax rates

Company tax rates

Find here Corporation Tax rates and allowances for companies.

UK Company tax rates: from 6th April 2020 non-resident companies of which the income is derived mainly from UK property have been subject to UK Corporation Tax in the same way as UK companies.

UK Company tax rates: from 6th April 2020 non-resident companies of which the income is derived mainly from UK property have been subject to UK Corporation Tax in the same way as UK companies.

Corporation Tax

For companies with profits under £300,000 the Corporation Tax rate is 19%, but for companies with profits over £50,000 the rates of tax will change on 1st April 2023

Calculation of the taxable income broadly follows the rules for individuals except that:

  1. From 6th April 2020 non-resident companies of which the income is derived mainly from UK property have been subject to UK Corporation Tax in the same way as UK companies.
  2. Transactions occurring outside the UK and relating to non-UK assets by a non-resident company are outside the scope of UK tax. UK resident companies are subject to Corporation Tax on income and gains wherever in the world they occur. The tax treaties may go some way to reducing the tax due if a transaction has been taxed overseas.
  3. Gains arising on disposals by companies are subject to Corporation Tax.
  4. The S24 loan interest relief restriction does not apply to companies.

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Annual Tax on Enveloped Dwellings (ATED)

Applies to residential properties held by non-natural persons and is subject to numerous exemptions and reliefs.

Property value2021-222022-23
£0 – £500KN/AN/A
£500K – £1m£3,700£3,800
£1m – £2m£7,500£7,700
£2m – £5m£25,300£26,050
£5m – £10m£59,100£60,900
£10m – £20m£118,600£122,250
Over £20m£237,400£244,750
  • For 2022-23 the bands are the value ranges as at 1st April 2017.
    For example if the house was worth £1.9m in April 2012, the 2017-18 tax would be £7,050; if the same house had gone up in value since 2012 and was worth £2.1m as at 1st April 2017, then the tax for 2022-23 would be £26,050 (payable 30th April 2022). That is because they are valued once every five years.
  • There are numerous reliefs including where the property has been let commercially. To claim a relief the owner MUST claim this relief on a full ATED return, which must be submitted annually.

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Note

  1. When a director/shareholder draws money from a UK company, there are only four types of withdrawal permitted:
    1. Repayment of a loan previously made to the company
    2. Reimbursement of expenses incurred on the business of the company
    3. Dividend
    4. Salary or bonus

      Dividend, salary, and bonuses are taxable in the hands of the recipient at the prevailing rates. While the salary or bonus may reduce the profit subject to Corporation Tax, a dividend does not. Salary and bonuses may be subject to National Insurance Contributionss. Payment of salary or bonus will require the creation of a PAYE scheme.
  2. A company does not enjoy the Personal Allowance for individuals, nor does it enjoy the annual exempt amount for Capital Gains.
For help with this or any other taxation matter, get in touch

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