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The Tax calculation template applies the corporation tax rate to the company's taxable total profits and works out the corporation tax liability — including marginal relief, any profits taxed at other rates, the reliefs and credits that reduce the tax, and the other charges that make up the final amount outstanding or overpaid.

Table of contents 

When should I use this template?

Use it once the Taxable income computation is complete. It takes the taxable total profits and calculates the tax due. Amounts to be offset against the tax liability are entered here (on the Tax calculation schedule), not in the individual income templates.

Before you start

Complete the income, relief and Taxable income templates so the taxable total profits are known, and confirm the number of associated companies in Return information, as this affects the rate.

How the calculation works

The template shows the calculation per accounting period / financial year (for example FY 2021 and FY 2022, with a Total column) and applies:

  • the small profits rate of 19% where augmented profits are at or below the lower limit;
  • the main rate of 25% where augmented profits are above the upper limit; and
  • the main rate reduced by marginal relief (fraction 3/200) between the two limits.

Augmented profits are taxable total profits plus exempt franked investment income. The lower limit (£50,000) and upper limit (£250,000) are divided by the number of associated companies and time-apportioned across financial years / short periods, so where a period straddles financial years with different rates the calculation is split.

Controls and sections

  • Profits to be taxed at other rates — tick to reveal a rate field and enter profits taxed at a rate other than the standard rate.
  • Effective current tax rate for the period for tax accounting purposes — shown and adjustable.
  • Tick this box if a repayment is due for this return period.
  • Reliefs and deductions in terms of tax — Community investment relief, Double taxation relief (with tick boxes for whether it includes an underlying rate relief claim, or an amount carried back from a later period), Advance Corporation Tax, and the total reliefs. (Other credits such as land remediation, creative tax credits and R&D payable credits also feature where applicable, and cannot be positive.)
  • Coronavirus support schemes and overpayments — Coronavirus Job Retention Scheme (CJRS) received, CJRS entitlement, CJRS overpayment already assessed or voluntarily disclosed, and other coronavirus overpayments.
  • Calculation of tax outstanding or overpaid — brings together the Net Corporation Tax liability, the tax payable on loans and arrangements to participators (the s455 charge, with a "Box A70 in the supplementary pages CT600A completed?" flag), CFC tax payable, income tax deducted from gross income included in profits (loan relationships and other), income tax repayable, and any coronavirus support-scheme overpayment now due — to arrive at the tax outstanding or overpaid. The net corporation tax liability cannot be negative (the reliefs cannot exceed the total tax charge).

What flows through to the rest of Corporation Tax?

The corporation tax calculated feeds the CT600 and the tax accounting templates, and is compared with tax paid in the Tax payments and Tax account templates to show the balance due or repayable.

Frequently asked questions

How do associated companies affect the calculation?

The £50,000 and £250,000 limits are divided by the number of associated companies, which can move the company into marginal relief or the main rate.

How do I tax part of the profit at a different rate?

Tick Profits to be taxed at other rates and enter the rate and the relevant profits.

Where do reliefs and credits go?

In the Reliefs and deductions section — community investment relief, double taxation relief (with its sub-options), Advance Corporation Tax, and other credits. The net liability cannot go below nil.

Does the s455 loans-to-participators charge appear here?

Yes — the tax payable on loans and arrangements to participators is brought into the Calculation of tax outstanding or overpaid, with the CT600A Box A70 flag.

Where do I record CJRS overpayments?

In the Coronavirus support schemes and overpayments section.

This article relates to the Tax calculation template in the UK Corporation Tax workflow. It is provided as guidance and does not constitute tax advice.