Corporation tax and marginal relief 2023
If you are looking for corporation tax rates and marginal relief from 2023 click here: :
Corporation Tax Rates 2013 - 2015
Up to 2016 there were two rates of corporation tax; one for small and another for main profits. The rates were as follows:
| Taxable Profit Threshold and Rates | 2013 / 2014 | 2014 / 2015 |
| Small Profits - To a maximum of | £1,500,000 | £1,500,000 |
| Small Profits Rate | 20% | 23% |
| Main Profits Rate | 20% | 21% |
Marginal Relief
Small company profits that were greater than £300,000 up to the maximum of £1,500,000 qualify for additional tax relief. This was marginal relief which was calculated by deducting the taxable profit from an upper llimit of £1,500,000 and then applying the marginal relief fraction as follows:
| Thresholds | 2013 / 2014 | 2014 / 2015 |
| Minimum - Profits greater than | £300,000 | £300,000 |
| Maximum - At or below | £1,500,000 | £1,500,000 |
| Fraction - Divide by | 400 | 400 |
| Fraction - Multiply by | 3 | 1 |
How to Calculate Marginal Relief
A business with a taxable profit of £400,000 in 2013/2014 would first have deducted that from the upper marginal relief threshold of £1,500,000 (i.e. £1,100,000).
That would then have been divided by 400 (i.e. £2,750) and multiplied by 3 (i.e. £8,250) which is then set off against the taxable profit.
There are two links below. The first will take you to an historical list of corporation tax rate, the second to a working example showing exactly how Figurewizard calculates forecasts for taxable profits and corporation tax before applying them to forecast profits and cash flows.
My financial years dont start on the first of april so which tax year do I use to calculate the tax and relief?
@Tony G
The allowances, rates and marginal relief are calculated on a pro-rata basis. If you follow the link to taxable profit and corporation tax forecast you can see exactly how Figurewizard does this.That does not need any input from you when producing your forecasts other than your figures for sales, margins and so on as our system calculates everything, including taxes from that alone.