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Corporation tax reliefs and opportunities

Whether running a limited company or an unincorporated association such as a sports club or voluntary group; it is a legal requirement to pay corporation tax on the profits (gains) you make.

Corporation tax reliefs are available to any company or organisation based in the UK. In this post we go through the tax reliefs and allowances available for your company.

Corporation tax rates

The rate of corporation tax will depend on how much profit your company makes.

The main rate for all profits is currently 20%. For year’s starting from 1 April 2017, the main rate will reduce to 19%, and 18% for the year starting 1 April 2020.

Tax reliefs and allowances

A company can deduct costs of running the business from its profits before tax when preparing yearly accounts. 

Some costs are not exempt from corporation tax and must be included in company profits on tax returns. Examples include non-work-related travel costs and most entertainment expenses.  Companies can claim back capital allowances on assets bought for the business. These assets are referred to as plant and machinery:

  • equipment
  • machinery
  • business vehicles – cars, vans and lorries.

A company can deduct some or all of the value of the assets from its profits before paying tax. The value is what’s paid for the asset. 

A company can also claim costs for non-business assets such as day-to-day running cost, items traded and interest payments for assets.

Contact us

Unsure on which allowances and reliefs best suite your company? Speak to an adviser today to find out we can help you with your tax planning.