Use MyBookkeepingManager to Calculate Corporation Tax

The MyBookkeepingManager bookkeeping software calculates how much corporation tax is due.

Corporation tax is a tax on a company's profits. For the fiscal year 2013-2014, for a business (limited company) with a profit of between £1 and £300,000, the rate is 20%.

Full details of the corporation tax rates that currently apply can be found on the HM Revenues & Customs website at http://www.hmrc.gov.uk/rates/corp.htm.

Corporation tax is calculated at the end of every accounting year and must be paid to HM Customs & Excise within nine months of the financial year end.

Simple IT Contractor Example

Company revenue from contract work (net - ie before VAT is applied) = £100,000

Salary taken by contractor = £20,000

Expenses taken out of the company for travel, accommodation, meals, etc = £10,000

Company Profit = £100,000 - £20,000 - £10,000 = £70,000

Corporation Tax Due = 20% of £70,000, which comes to £14,000

(Incidentally, this means that the amount available for dividend payments is £56,000.)

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