In recent years, for small companies the Corporation Tax Rate has effectively increased from 20% to 25.07% (small UK business had a 6% rise in tax on profits – including dividend tax!).
Whereas, from 2006/07 to 2017/18, the main Corporation Tax Rate (for more profitable companies) was reduced from 30% to 19% (so for institutional shareholders or foreign owners there has been an 11% drop in the tax rate).
In the last 12 years or so, large companies have benefitted massively from tax cuts. In contrast, small company owners have recently been hammered by the dividend tax. It does seem to be the case that recent Chancellors have been very favourable to big business – but less helpful to small UK businesses!
| Tax Year | Main rate | Small companies rate (incl. dividend tax from 2016/17) |
| 2006/07 | 30% | 19% |
| 2007/08 | 30% | 20% |
| 2008/09 to 2010/11 | 28% | 21% |
| 2011/12 | 26% | 20% |
| 2012/13 | 24% | 20% |
| 2013/14 | 23% | 20% |
| 2014/15 | 21% | 20% |
| 2015/16 | 20% | 20% |
| 2016/17 | 20% | 20%+6% dividend tax = 26% |
| 2017/18 | 19% | 19%+6.07% dividend tax = 25.07% |