What is corporation tax?
Corporation tax is actually much simpler than you might think. Basically, this is where HMRC takes a tax on the profits of either limited companies, or specific organisations like associations, societies, clubs, co-operatives, unincorporated bodies or charities. Basically, once these organisations and businesses go over the threshold, they will have to pay tax on their profits just like everyone else does. These taxable profits for these corporations may include the profits from taxable income, including trading profits, or investment profits (except the dividend income, which is actually taxed quite differently).
Capital gains are taxable, too. This is also sometimes known as ‘chargeable gains’ for purposes of Corporation Tax.
So when it comes to running a limited business or any kind of organisation, it’s important for you to understand corporation tax and to ensure that everything is running smoothly and legally in terms of finances. Failure to do so can land you in a lot of legal difficulty!
Stonehouse Accountants operate in the Peterborough, Kettering, Corby and Market Harborough area, call us now if you’re looking to change accountant or need a new one. 01733 26588.