2020 Corporation Tax Example for £20,000.00 Profit

This simple £20,000.00 corporation tax example is designed to illustrate how corporation tax is calculated in 2020. If you wish to calculate your corporation tax for any tax years preceding 2015, we suggest you use our detailed legacy corporation tax calculator for Scotland. For all tax years from 2015 onwards, use our latest corporation tax calculator which is updated for corporation tax rates up to and including the 2020 tax year which runs from 1st April 2020 to the 31st March 2021.

Please note that this corporation tax example assumes that the companies financial year is aligned with the Scottish tax year. This is to provide a simple illustration of how corporation tax is calculated. Most companies in Scotland have accounting years which are different to the Scottish tax year. In these cases, the corporation tax is calculated pro-rata with the profits share from each tax year taxed at the appropriate corporation tax rate. You can use the Corporation tax calculator to calculate corporation tax in this way, the calculator provides a detailed, step-by-step guide to calculating corporation tax when the financial year bridges two tax years

2020 Corporation Tax Calculation based on Standard Tax Year
£20,000.00Annual Reported Profits between the 1st April 2020 to the 31st March 2021
x17%Corporation Tax Rate in 2020

=£3,400.00Corporation tax due in 2020

How did we calculate your Corporation Tax in 2020?

We used the following criteria to calculate your corporation tax:

  1. You have used the standard tax year as your companies financial years for corporation tax purposes in 2020. This means that your companies financial year runs from April 2020 to the 31st March 2021. As such, only one corporation tax rate is applied against your companies annual profits.
  2. We used the 2020 tax year for this corporation tax calculation
  3. We used reported profits of £20,000.00 for this corporation tax calculation
  4. We used a corporation tax rate of 17% for this corporation tax calculation, that is the corporation tax rate set by HMRC for 2020

Corporation Tax formula in 2020?

CT = P x CTR

Where:

  • CT = Corporation Tax due to HMRC
  • P = Declared Profits
  • CTR = Corporation Tax Rate as set by HMRC for the 2020 tax year

So, in this corporation tax scenario:

CT = £20,000.00 x 17%
CT = £3,400.00

The Corporation tax due to HMRC in 2020 for annual profits of £20,000.00 is £3,400.00.

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Corporation Tax Further Reading

The following articles are particularly useful for understanding how corporation tax is calculated and how to calculate corporation tax manually.