CTM03930 - Small profits rate: financial year 2023 onwards: no associated companies: accounting period less than 12 months

CTA10/S18D (4)

Where the accounting period is less than twelve months, the upper and lower limits are reduced proportionately.

For example, Company X with profits of £55,000 has a 9-month accounting period of 1 January 2024 to 30 September 2024.  »Ê¹ÚÌåÓýapp upper and lower limits applicable to this company will be: 

Upper limit = £250,000 x 9/12 = £187,500 

Lower limit = £50,000 x 9/12 = £37,500 

(Note that strictly the calculation should be carried out by reference to the number of days in the short AP rather than months). 

»Ê¹ÚÌåÓýapp CT due on its profits is calculated as follows: 

»Ê¹ÚÌåÓýapp profits fall above the lower limit so they are chargeable at the main rate with marginal relief 

£55,000 x 25% = £13,750 

Less marginal relief 

3/200 x (£187,500 - £55,000) = £1,987.50

CT liability = £13,750 - £1,987.50 = £11,762.50  Â