Definition of corporation tax

Companies are subject to corporation tax, which is levied on business profits and other forms of income, as well as on chargeable gains accruing to companies.

Corporation tax is charged on the profits of a 'financial year' which runs from 1 April. The profits of a company are calculated by reference to its accounting periods and are then, where necessary, apportioned on a time basis between the financial years in which the accounting period falls. 

 See also corporation tax deductions. [1]

 

corporation tax in the news

In the UK Summer Budget 2015 speech, the government announced that corporation tax will be cut to 19 per cent in 2017. An FT reporter wrote: "Cutting corporation tax to 18 per cent by 2020 will be seen as an act of economic warfare by some in the US, Germany and France, where headline rates are 30 per cent or above. A barrage of criticism of the UK as a tax haven will probably ensue." [2]