What is the Corporation Tax on £100K? An Essential Guide for UK Businesses in 2024

What is the Corporation Tax on £100K? An Essential Guide for UK Businesses in 2024

Understanding corporation tax is crucial for UK businesses aiming to stay compliant and financially efficient. As of 2024, the corporation tax rate on profits is set at 25%. This guide will break down what this means for a business earning £100,000 in profits, using practical examples to illustrate the impact of income and expenses on your tax obligations.

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What is Corporation Tax?

Corporation tax is a levy placed on the profits of limited companies and other organisations, including clubs, societies, associations, and co-operatives. In the UK, companies must calculate their taxable profits and file their returns with HMRC annually.

Example of Corporation Tax Calculation

Let’s consider a business with a revenue of £200,000 and expenses amounting to £100,000. The profit, which is the amount subject to corporation tax, would be:

  • Revenue: £200,000
  • Expenses: £100,000
  • Profit: £100,000

With the corporation tax rate at 25%, the tax owed would be:

  • Corporation Tax (25% of £100,000): £25,000

Understanding Income and Expenses

Income: This includes all the money your business earns from its operations. For instance, a marketing consultancy may generate income from providing services to various clients. Each contract contributes to the overall revenue of the business.

Expenses: These are the costs incurred while running your business. They can include salaries, rent, office supplies, and utilities. For example, if a marketing consultancy spends £40,000 on staff salaries, £20,000 on office rent, and £40,000 on other operational costs, these amounts are deducted from the total revenue to determine the taxable profit.

The Importance of Accurate Reporting

Accurately reporting income and expenses is vital. Overstating expenses or understating income can lead to legal issues and hefty fines. It’s essential to keep detailed records and seek professional advice to ensure compliance.

Case Study: GM Professional Accountants Client

One of our clients, a medium-sized IT firm, had a revenue of £300,000 and expenses of £150,000 in 2022. They initially calculated their tax based on estimated expenses, which resulted in an underpayment. GM Professional Accountants reviewed their records, identified missed allowable expenses, and accurately recalculated their tax obligation.

Filing Dates and Deadlines

For the 2024 tax year, the deadline to file your company tax return with HMRC is 12 months after the end of your accounting period. For instance, if your accounting period ends on March 31, 2024, your filing deadline would be March 31, 2025. However, the payment of corporation tax is due 9 months and 1 day after the end of the accounting period. In the above example, the tax payment deadline would be January 1, 2025.

Leveraging Professional Help

Corporation tax can be daunting, GM Professional Accountants, offer expert advice and services to ensure your business complies with all tax regulations while maximising tax efficiency. Their thorough understanding of UK tax laws and dedication to client success make them a trusted partner for businesses of all sizes.


Understanding corporation tax on £100K profits in 2024 is essential for UK businesses. With a tax rate of 25%, careful calculation and accurate reporting are crucial. Seeking assistance from professionals like GM Professional Accountants can help ensure compliance and optimise your financial outcomes.

For more detailed guidance on corporation tax, visit the HMRC Corporation Tax page and consider consulting with experts to navigate this vital aspect of your business’s financial health.

By ensuring your business accurately reports income and expenses and understands the deadlines, you can effectively manage your corporation tax obligations and focus on growth and success

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