> Corporation Tax
The company must be within the scope of corporation tax, that is, carrying out a business activity that produces income or chargeable gains and it is either:
- UK resident
- Non UK resident but carrying on a UK trade through a permanent establishment
So what is a company? A company is a body corporate or unincorporated association. A body corporate is a body which has legal status conferred upon by law.
A company is liable to corporation tax on its trading profits and chargeable gains. A company may make a loss and this loss is allowable in different ways depending upon the source of the loss.
Corporation tax is charged for an accounting period although the rates and thresholds indicated by central government are set for “financial years”. These run from 1st April to 31st March.
There are as you would expect many rules governing limited companies and the tax thereon. If you are confused or need to know more about corporation tax call Nathans for a free initial consultation.
Limited companies are the most common vehicle for people in business and they range from huge multinationals to micro businesses. The most common reasons for trading through a limited company are 1) limited liability 2) tax efficiency. Business owners should be aware that with limited companies come responsibilities as directors and shareholders.