What CT tax rate?

[stphnstevey]

As most year end's are out of Syc with the financial year end (ie 5th April-5th April), which year's CT rate do you use?

eg say my Year end is May 2009, do I pay CT at 08-09 rates or 09-10 rates?

 

[dp0848]

Your apportion the profit across the financial years in question and apply the appropriate CT rate to each portion. The apportionment is done using days not months.

The maths are simple. Take the profit, divide it by 365 (or 366 in a leap year) and multiply by the number of days that fall in to each of the financial years in question.

 

[Williams lester]

Both! You will pay 10 months at 08-09 rate of 21% and 2 months at 09-10 rate of 21%! This is assuming your profit is £300k or less.

 

[dp0848]

Both! You will pay 10 months at 08-09 rate of 21% and 2 months at 09-10 rate of 21%! This is assuming your profit is £300k or less.

Its done on days not months. Use months and you'll get your sums wrong!

 

[Williams lester]

Its done on days not months. Use months and you'll get your sums wrong!

Yes, I was just pointing out that in this instance the rates for 08-09 and 09-10 are the same. So in this instance it will make no difference. But yes it is done by days not months.

 

[stphnstevey]

Thanks

So profit is averaged out?

Just thinking if one years CT tax rate was lower than next year, it would make no difference in what financial year I earned the money in as my taxable profit would be divided over the entire year?

Calander days or are the days per month averaged out as well?

 

[dp0848]

Thanks

So profit is averaged out?

Just thinking if one years CT tax rate was lower than next year, it would make no difference in what financial year I earned the money in as my taxable profit would be divided over the entire year?

Yep, thats right.

 

[dp0848]

Have a look at this link stphnstevey. It will do the sums for you.

http://mrrcalculator.hmrc.gov.uk/MRR0.aspx

 

[dp0848]

Thanks

So profit is averaged out?

Just thinking if one years CT tax rate was lower than next year, it would make no difference in what financial year I earned the money in as my taxable profit would be divided over the entire year?

Calander days or are the days per month averaged out as well?

Sorry, missed the last bit of your post. Calendar days.

 

[stphnstevey]

Thanks all!

 

[DIY Accounting]

Also corporation tax rates are set from 1st April
Self employed tax rates set 6 April