Corporation Tax Return

The CT600 is a comprehensive document that companies must complete and submit to HMRC. It has details, such as profits, losses and loss reliefs, expenses, and tax calculations and other adjustments. This return enables HMRC to assess a company's corporation tax liability accurately.

Who Should Submit the CT600? 

All companies liable for corporation tax in the UK, including limited companies, foreign companies with UK operations, and unincorporated associations, must submit the CT600. This includes both profitable and non-profitable entities, as well as dormant companies. It's essential to determine your company's tax liability and submit the CT600 accordingly.  

 

Corporation Tax Rates for 2023/24: For the financial year 2023/24, the corporation tax rates are as follows:

Small Company Rates:

- Profits up to £50,000: 19%
- Profits between £50,001 and £250,000: Marginal Relief applies
- Profits above £250,000: 25%

Margin Relief:

Margin relief is applicable to companies with profits ranging from £50,001 to £250,000. It allows for a gradual transition from the lower small company rate to the standard corporation tax rate.

Example:

Let's consider a hypothetical company, XYZ Ltd, with profits of £150,000 for the accounting period ending on March 31, 2024.

1. Calculate the taxable profit:

XYZ Ltd's taxable profit = £150,000

2. Calculate the small company rate tax:

For the first £50,000: £50,000 x 19% = £9,500

3. Calculate the marginal relief:

The remaining profit within the £50,001-£250,000 range is £100,000 (£150,000 - £50,000). Assuming the standard corporation tax rate is 19% and the small company rate is also 19%:

(£100,000 ÷ £200,000) x (19% - 19%) = £0 (Marginal Relief)

4. Calculate the total corporation tax:

Total corporation tax = Small company rate tax + Marginal Relief Total corporation tax = £9,500 + £0 = £9,500

Standard Corporation Tax Rate:

For companies with profits exceeding £250,000, the standard corporation tax rate of 19% applies, simplifying tax calculations for larger businesses.