Limited Company: How much tax?

[pete12345]

Just a quick question...

Do limited companies have to pay 17.5% for VAT on all stock sold and also 40% Tax on profits?

Thanks in advance ;)

[QuickHomeBuyers]

Vat is 17.5% for standard rated, 5% for reduced.

Corp tax is variable between 21% to 28% depending on your profit level.

http://www.hmrc.gov.uk/rates/corp.htm

[David Griffiths]

That question needs so much clarification

IF a company is VAT registered, then it must account for VAT on its sales. That might be at 17.5%, but that's based on the VAT exclusive value. What that means is if you take £100 the actual VAT that is charged is about £15 (£85 + £15 VAT). The VAT rate might also be 5% or 0%. BUT from that you deduct the VAT that was paid when the goods were purchased and any VAT paid on overheads or capital equipment (just for a start) unless you are making exempt supplies.

Companies pay tax on profits currently at 22% for profits up to £300,000. It's 28% for profits over £1.5 million, and for profits in between, the CT rate is in between.

Can't get it any shorter than that! :) Even then it's possible to pick holes in it.

[QuickHomeBuyers]

That question needs so much clarification

IF a company is VAT registered, then it must account for VAT on its sales. That might be at 17.5%, but that's based on the VAT exclusive value. What that means is if you take £100 the actual VAT that is charged is about £15 (£85 + £15 VAT). The VAT rate might also be 5% or 0%. BUT from that you deduct the VAT that was paid when the goods were purchased and any VAT paid on overheads or capital equipment (just for a start) unless you are making exempt supplies.

Companies pay tax on profits currently at 22% for profits up to £300,000. It's 28% for profits over £1.5 million, and for profits in between, the CT rate is in between.

Can't get it any shorter than that! :) Even then it's possible to pick holes in it.
You are the expert but why is Ctax for under £300,000 @ 22% I thought, its 21 ?

[Billmccallum]

You are the expert but why is Ctax for under £300,000 @ 22% I thought, its 21 ?

If you read the small print on your link, you will see why http://www.hmrc.gov.uk/rates/corp.htm

[QuickHomeBuyers]

If you read the small print on your link, you will see why http://www.hmrc.gov.uk/rates/corp.htm

Still dont get it. :|

[David Griffiths]

You are the expert but why is Ctax for under £300,000 @ 22% I thought, its 21 ?

It is - simply a typo

Good job we use software to do the real calculations! :redface:

There was a proposal to increase to 22% but the last government deferred it for one year. Who knows what will happen now.

[KM-Tiger]

Who knows what will happen now.

Back to 18%, and zero on the first £10K?

Those were the days!