This value is calculated on the returns that a company generates. It depends on how much profit a company generates at a certain time frame. This is mostly calculated on a yearly basis after all the value of the revenue is obtained. This is divided in terms of whether the company is a ring-fenced company or non-ring fenced. The difference between this is that ring fenced companies actually make money from oil activities in the United Kingdom. The non-ring fenced companies actually make their money from other ventures or activities aside from those that have oil rights in the UK. The following are some of the details that apply to these types of Company Corporation taxes:
Non-Ring Fence Companies. The profits generated are not due to having a stake in extraction of oil in the United Kingdom. Generally, oil companies usually earn a lot of profit in their dealings and this means that a specific rate has to be set for the activities to go on. The higher the money a company gets, then the higher the corporation tax needed in the end. The following are some of the rates that were in use as at 2014. Any company earning a small profit of around £300,000 had to produce tax at a rate of around 20%.
Ring Fencde Companies. After revision in the April 1, 2015 the rate for anyone with a company was set at a value of 19%. This however will change as at April 1, 2020 to a value of 18% (subject to government changes). This makes it possible for other companies to retain their properties and grow in other sectors. The rates have been constant since the year 2014 but this will change at the start of the year 2020. Companies generating profits of below £300,000 used to pay 20% while companies of over £300,000 pay 21%.
Aside from the two above, there is also the Corporation Tax on Chargeable gains. This occurs when one wants to sell a business asset. Most companies that wish to liquidate their companies have to pay tax as soon as possible. This requires a yearly calculation before the right amount is given for all the tax to be calculated using Indexation Allowance Rates. In order to avoid any problems with the law in the United Kingdom, it is necessary that taxes are paid. This can be on a personal level or even in general through the companys activities.