The tax on the profits etc, of companies is called corporation tax which is charged at the present rate of 28% for large companies, subject to special relief for small companies. Full corporation tax is now charged both on company profits and its capital gains.

The rate of corporation tax is normally fixed by Parliament in the Finance Act each year for the preceding "financial year". A "financial year" commences on 1 April and runs through to the following 31st March.

Accounting Periods - Corporation tax is charged in respect of accounting periods. These usually coincide with the periods for which the company prepares its annual accounts but cannot exceed 12 months in duration. Thus, if a company prepares accounts for a period of 18 months, the first 12 months will constitute one accounting period and the remaining six months are treated as another accounting period. The actual tax is payable nine months after the end of each accounting period.