Corporation Tax is a tax on the taxable profits of limited companies and other organisations including clubs, societies, associations and other unincorporated bodies.

 

  • Corporation Tax Rate: Main Rate 25% (companies with profits over £250,000)
  • Small profits rate of 19% ( companies with profits under £50,000)

 

Corporation Tax is payable on profits from doing business as:

  1. A limited company;
  2. Any foreign company with a UK branch or office;
  3. A club, co-operative or other unincorporated association; e.g. a community group or sports club.

You don’t get a bill for Corporation Tax.

There are specific things you must do to work out, pay and report your tax.

  1. Register for Corporation Tax when you start doing business or restart a dormant business;

Unincorporated associations must write to HMRC.

2. Keep Accounting records and prepare a Company Tax Return to work out how much Corporation Tax to pay.

3.Pay Corporation Tax or Report to HMRC if you have nothing to pay by your deadline

- this is usually 9 months and 1 day after the end of your ‘accounting period’.

4.File you Company Tax Return by your deadline- this is usually 12 months after the end of your accounting period.

Your Accounting Period is normally the same 12 months as the financial year covered by your annual accounts.

Corporation Tax is payable on:

Taxable profits which include the money your company or association makes from:

  • doing business (‘trading profits’)
  • investments
  • selling assets for more than they cost (‘chargeable gains’)

If your company is based in the UK, it pays Corporation Tax on all its profits from the UK and abroad.

If your company isn’t based in the UK but has an office or branch here, it only pays Corporation Tax on profits from its UK activities.