gulsumgokce started this topic @ 19:37 on 25/02/2006
If my Ltd company makes £70k profit...
Is the first £10k excempt from corporation tax in the same way as the first £4.5k is in income tax? Or is the whole lot taxed at 19%?
Also... I incorporated in early February this year... when do I pay this tax? Does my company tax year run from Feb to Feb or April to April?
RE: Corporation Tax
inzvestor | 25/02/2006 08:19 PM
Your accountant is the best source of advice when asking these questions.
If running a Ltd company I would highly recommend retaining the services of a good accountant (if you haven't done so already)
Your accountant will be able to advise on the most tax efficient strategies for your individual scenario.
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Glenn Watson Business Consultancy @ Inzvestor
RE: RE: Corporation Tax
gulsumgokce | 25/02/2006 09:51 PM
I'm seeing him on Monday - just wanted a quick answer to this question. 
RE: Corporation Tax
fastfences | 25/02/2006 11:06 PM
Acknowledging the above post, the quick answer is: your tax year can be for up to 18 months in the first year of trading then every 12 months thereafter. I formed my company in November 2004, but did not commence trading until April 2005. My 'accounting period' will run through til 30th April 2006.
Cheers, Nigel
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RE: Corporation Tax
James Smith | 26/02/2006 10:51 AM
Companies pay tax at 19% on the whole lot as from 1st April 2006.
The nil rate band is a bit of a joke, it doesnt work quite like income tax as an allowance as you might imagine.
Your company year end is upto you to set. The default is the end of the month in which you reigstered. Ie if you registered on the 26th Feb 2005, your default year end date with be the 28th Feb 2006 unless you amend it.
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James Smith
Chartered Accountant
www.jamesesmith.co.uk
01235 536 773
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Your indispensable guide to Small Business Bookkeeping, Self-Assessment & VAT
RE: RE: Corporation Tax
louis1st | 03/03/2006 09:23 PM
I thought that there was indeed a nil rate band below £10k profit for small companies...
Is this not the case then? why do you say "it's a bit of a joke"?
RE: Corporation Tax
James Smith | 06/03/2006 09:29 AM
Without getting into really quite complicated maths, in its current form to the end of this month (the rules have changed 3 times in the 5 years it has been in existence) it partly and sometimes completely disappears if you pay out dividends. It also gradually disappears as your profits increase over £10k. By the time you hit £50k there is no nil rate band, you are taxed on the whole profit at 19%.
It really is a horrible little complication in the tax system, although I have been happily using this little gift to save clients tax for several years. Gordon woke up to fact that us accountants had actually been doing our job and using all the legal opportunities in the tax system to save our clients money and has been gradually closing down the ‘loophole’ he created ever since.
Regards,
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James Smith
Chartered Accountant
www.jamesesmith.co.uk
01235 536 773
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Your indispensable guide to Small Business Bookkeeping, Self-Assessment & VAT
