Corporation Tax 2016/17 - Cutter & Co Chartered Accountants

Corporation Tax

From	1.4.2016	1.4.2015
Corporation Tax rate	20%	20%

Most companies must pay their Corporation Tax nine months and a day after the end of the accounting period.
Large companies or groups generally make four quarterly payments on account of Corporation Tax, starting in the seventh month after the start of a 12-month accounting period. The payment is made on the 14th day of the relevant month, with interest running on any balance due until final settlement of the period’s liability.
All companies must file Corporation Tax returns online 12 months after the end of the accounting period.

Effective from	1.4.2016	1.4.2015
SME enhanced deduction	130%	130%
Large company enhanced deduction	N/A	30%
Large company above the line credit (RDEC)	11%	11%

The above enhanced deductions are for qualifying revenue expenditure on qualifying R&D projects; various conditions apply to both.
Where an SME makes a loss it can surrender that loss for payable tax credit worth 14.5% of loss.
RDEC is a taxable expenditure credit for qualifying R&D. Prior to 1 April 2016 large companies had a choice of claiming RDEC or 30% enhanced deduction.

Area	Relief
Intangible assets: goodwill, know-how and patent rights	Deduction given according to depreciation in the accounts, unless the circumstances in Note 1 below apply.
Patent income	Reduced rate of CT down to 10%.
Shares held for at least 12 months in other trading companies	No gains on disposal if at least 10% of company’s share capital held.
Creative industries producing: films, high-end or children’s TV programmes, video games or theatre productions	Enhanced deductions for certain expenditure and losses surrendered for payable tax credits.

Restrictions apply to any goodwill acquired from 8.7.2015 and to goodwill on incorporation from 3.12.2014.
The above is a brief summary of selected reliefs available to companies; other conditions apply.