Corporation Tax Act 2010 section 24

The lower limit and the upper limit

Section 24 sets the lower and upper profit limits used to determine whether a company qualifies for the small profits rate of corporation tax or for marginal relief.

• The standard lower limit is £300,000 and the standard upper limit is £1,500,000, applying where a company has no associated companies.
• Where a company has one or more associated companies, both limits are divided equally among the total number of companies (the company itself plus its associates).
• If a company's accounting period is shorter than 12 months, both limits are proportionately reduced to reflect the shorter period.
• These limits determine whether a company pays the small profits rate, the main rate, or a rate somewhere in between under the marginal relief rules.