Corporation Tax for companies

What is Corporation Tax?

Companies may pay Corporation Tax on taxable profits. The calculation starts with accounting results and applies tax adjustments, reliefs and rules for the relevant accounting period.

How do you register?

A company must tell HMRC that it is within Corporation Tax and provide the information required for its accounting period. The registration process is separate from filing the company’s accounts at Companies House.

How is Corporation Tax calculated?

For ordinary company profits under the current rules, the small profits rate is 19% at £50,000 or less and the main rate is 25% above £250,000. Marginal relief may apply between those limits. Associated companies and short accounting periods reduce the limits; eligibility and qualifying distributions can also affect the calculation. Special rules apply to ring-fence profits. Check the rules for the company’s accounting period.

What must a company file?

A Company Tax Return is normally due within 12 months of the end of the accounting period. File it when HMRC has issued a notice to deliver, even if the company made a loss or has no Corporation Tax to pay. Private-company annual accounts are normally due at Companies House within 9 months of the financial year end; first accounts are normally due 21 months after incorporation. Check the company’s actual deadline, particularly where its accounting period has changed.

Corporation Tax is usually payable 9 months and 1 day after the accounting period ends. Large and very large companies can have instalment deadlines, so check the payment rules before relying on the usual date.

Company responsibilities

• Keep accurate accounting and tax records.
• Track the accounting period and filing deadlines.
• Register with HMRC when required.
• Submit the Company Tax Return on time.
• Pay Corporation Tax by the applicable deadline.

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