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 拢55,000 has a 9-month accounting period of 1 January 2024 to 30 September 2024.聽 The upper and lower limits applicable to this company will be:聽
Upper limit = 拢250,000 x 9/12 = 拢187,500聽
Lower limit = 拢50,000 x 9/12 = 拢37,500聽
(Note that strictly the calculation should be carried out by reference to the number of days in the short AP rather than months).聽
The CT due on its profits is calculated as follows:聽
The profits fall above the lower limit so they are chargeable at the main rate with marginal relief聽
拢55,000 x 25% = 拢13,750聽
Less marginal relief聽
3/200 x (拢187,500 - 拢55,000) = 拢1,987.50
CT liability = 拢13,750 - 拢1,987.50 = 拢11,762.50聽聽聽