Corporation Tax

Corporation tax is a tax on the profits of UK-based companies, as well as foreign companies with a UK presence. It applies to profits generated from trading, investments, and selling assets for profit. The exact rate a company pays depends on its level of taxable profits and the applicable Corporation Tax rules and reliefs

Yes, companies can reduce corporation tax by claiming allowable expenses, capital allowances on assets, and research and development (R&D) tax credits, if eligible. Why read our blogs on our home page for guidance.

Companies must maintain accurate records of income, expenses, and other financial details for six years. This includes receipts, bank statements, invoices, and payroll records.

Yes, HMRC charges penalties for late filing. The penalties range from £100 for a return filed one day late, increasing with further delays and potentially leading to an inquiry if persistent.

Yes, companies can amend their corporation tax return within 12 months of the filing deadline if they discover errors or need to update figures after filing.

A company must register for corporation tax with HMRC within three months of starting business operations, which includes making a profit, selling goods or services, or hiring employees.

Companies must file their corporation tax return (CT600) within 12 months after the end of their accounting period. However, tax payment deadlines differ.

Corporation tax is usually due nine months and one day after the end of the company’s accounting period. For example, if a company’s financial year ends on December 31, its tax payment is due by October 1 of the following year.

An accounting period is the time for which a company prepares its financial statements. It cannot be longer than 12 months for corporation tax purposes, although companies can have shorter periods

Late payments can result in interest charges. HMRC charges interest on unpaid corporation tax from the due date until full payment is made.

Corporation Tax is due 9 months and 1 day after the end of the company’s accounting period, even though the tax return itself is due later.

Yes, companies can amend their corporation tax return within 12 months of the filing deadline if they discover errors or need to update figures after filing.

No, new companies only pay corporation tax when they generate taxable profits. However, they must still register for corporation tax within three months of starting business activity.

HMRC issues a Unique Taxpayer Reference (UTR) for corporation tax when a company registers. This 10-digit number is essential for filing tax returns and making payments.

Accurate bookkeeping is essential for correct corporation tax reporting. Every business expense and income record directly impacts your taxable profit. Poor bookkeeping often leads to missed deductions or HMRC penalties. See our Bookkeeping page to keep your records accurate and HMRC-ready all year round.

Absolutely. VAT-registered businesses must ensure VAT transactions are accurately reflected in their bookkeeping and company accounts. Consistent VAT reporting helps prevent discrepancies when preparing your corporation tax return. If you need support with VAT bookkeeping or returns, our VAT services can help you stay compliant and efficient.

As of the 2025 Autumn Budget, the headline corporation tax rates in the UK have not changed. The main rate remains 25% for companies with profits above £250,000. For smaller companies with profits up to £50,000, the small profits rate stays at 19%. For companies with profits between £50,001 and £250,000, a marginal relief regime continues, resulting in a gradual sliding scale between 19% and 25%.

The Government has confirmed this rate structure will stay in place for the current Parliament.
That said while the headline rates remain unchanged, the Autumn Budget did introduce changes to other aspects of corporate taxation that may affect your overall tax bill. Key changes include:
A new first-year allowance (FYA) of 40% on certain qualifying plant and machinery expenditures from January 2026.
A reduction in the main rate Writing-Down Allowance (WDA) from 18% to 14% from 1 April 2026 (for assets not qualifying for first-year allowances).
So while the overall corporation tax rate you pay on profits has not changed, the tax reliefs and allowances available for investments, assets, and capital expenditure have changed. That can have a big impact especially for companies planning to invest in equipment, machinery, or other qualifying assets.