Also known as corporate taxation, refers to the taxes imposed on the profits earned by a corporation. This type of tax is a significant source of revenue for government.

The tax is levied on the company’s taxable income, which is calculated by subtracting allowable expenses.

Currently, the UK corporation tax rates are as follows:-

• Main Rate: 25% for companies with profits over £250,000.
• Small Profits Rate: 19% for companies with profits of £50,000 or less.
• Marginal Relief: Available for companies with profits between £50,000 and £250,000, which provides a gradual increase in the effective corporation tax rate.

These rates apply to non-ring fence profits.