The main rate of UK
corporation tax was changed as part of the 2007 Finance Act. The fall from
30% to 28% is effective from 1 April 2008.
Companies with profits
from oil extraction and oil rights in the UK and UK Continental shelf
(otherwise know as ‘ring fence companies’) are exempted from the change in
the main rate of UK corporation tax. Such companies are required to continue
calculating their tax using a rate of 30%, together with a 20% supplementary
charge on ring fence profits.
The small companies'
rate will become 21% (up from 20%) from 1 April 2008 and the fraction used
in smoothing the difference between this and the main corporate rate
(marginal small companies' relief) will be 7/400.
The small companies’
rate for ring fence profits will remain at 19% from 1 April 2008 and the
marginal small companies’ relief fraction for ring fence profits will remain
Profit limits will
remain the same: the upper limit for large companies paying tax at the main
rate of UK corporation tax being £1.5m and the lower limit for companies
which pay tax at the small companies’ rate being £300,000.