Corporation Tax Act 2010 section 279E

The lower limit and the upper limit

Section 279E defines the lower and upper profit limits used to determine the rate of corporation tax applicable to a company's accounting period, and explains how those limits are adjusted where the company has associated companies or a short accounting period.

• Where a company has no associated companies, the lower limit is £50,000 and the upper limit is £250,000.
• Where a company has one or more associated companies (referred to as related 51% group companies), the lower limit of £300,000 and upper limit of £1,500,000 are each divided by one plus the number of such companies.
• The effect of associated companies is to reduce both limits, potentially pushing a company into a higher rate band even if its own profits have not changed.
• Where an accounting period is shorter than 12 months, both limits are reduced proportionately to reflect the shorter period.