1. What is UK Corporation Tax?

UK Corporation Tax is a tax levied on the taxable profits of limited companies and other organizations including clubs, societies, associations, and other unincorporated bodies. The standard rate for 2025 is 25% on company profits.

2. How Does the Calculator Work?

The calculator uses the Corporation Tax formula:

Where:

• \( Profits \) — Company taxable profits in GBP
• \( 25\% \) — Standard corporation tax rate for 2025

Explanation: The calculation applies the current UK corporation tax rate of 25% to the company's taxable profits to determine the tax liability.

3. Importance of Corporation Tax Calculation

Details: Accurate corporation tax calculation is essential for UK companies to meet their legal obligations, plan cash flow, and ensure compliance with HMRC requirements. Proper tax planning helps optimize financial performance.

4. Using the Calculator

Tips: Enter company profits in GBP. The value must be positive and represents the taxable profits before corporation tax deduction. The calculator uses the standard 25% rate applicable for 2025.

5. Frequently Asked Questions (FAQ)

Q1: What is the current UK corporation tax rate?
A: The standard corporation tax rate for 2025 is 25% for companies with profits over £250,000. Different rates may apply for smaller companies.

Q2: When is corporation tax due in the UK?
A: Corporation tax is generally due 9 months and 1 day after the end of your accounting period, while the corporation tax return is due 12 months after the end of the accounting period.

Q3: What expenses can be deducted from profits?
A: Allowable business expenses include staff costs, raw materials, equipment, business premises costs, travel expenses, and other legitimate business costs incurred wholly and exclusively for business purposes.

Q4: Are there different tax rates for small companies?
A: Yes, small profits rate may apply to companies with profits below certain thresholds. It's important to check current HMRC guidelines for specific rates and thresholds.

Q5: Can corporation tax be paid in installments?
A: Very large companies may need to pay corporation tax in installments. Most small and medium-sized companies pay their corporation tax in one payment 9 months after their accounting period ends.