What is corporation tax?
Corporation tax is the portion of profit your limited company pays to HM Revenue and Customs (HMRC) as tax, subject to specific allowances and reliefs during an accounting period.
How do I determine my corporation tax rate?
Your Corporation Tax rate depends on how much taxable profit your company makes in a financial year. Here’s how it works:
- Profits of £50,000 or less – You pay the Small Profits Rate of 19%.
- Profits over £250,000 – You pay the Main Rate of 25%.
- Profits between £50,000 and £250,000 – You may qualify for Marginal Relief, which means your tax rate gradually increases from 19% to 25%, depending on how close your profits are to £250,000.
What are the key dates and filing deadlines for limited companies in the UK?
Limited companies in the UK follow reporting timelines based on their incorporation date, which marks the start of their legal existence and serves as the reference for filing obligations.
Deadlines for annual accounts, confirmation statements, and tax filings are calculated in months or weeks from this date, ensuring consistency with Companies House and HMRC regulations. The approach provides a structured filing schedule tailored to each company’s financial year, rather than a universal deadline.
| Corporation Tax Deadlines | |
|---|---|
| Register for corporation tax | 3 months after beginning commencement activities |
| Corporation tax return (CT600) | 12 months after the end of your accounting period. |
| Paying your corporation tax bill | 9 months and one day after the end of the accounting period. |
| Additional Company Filings Deadlines | |
| Confirmation Statements | A confirmation statement must be filed at least once every 12 months, and the filing due date is 14 days after the end of a confirmation period or at the business’s first anniversary. |
| Annual Accounts | Private limited companies must file annual accounts 9 months after the end of their financial year. |
| Dormant Accounts | Companies not actively trading must file dormant accounts 9 months after their tax accounting year ends. |
If you’re unsure of your exact filing and payment dates, you can easily check your Corporation Tax deadline using our interactive calculator. Simply enter your incorporation or accounting reference date to view your Corporation Tax, annual accounts, and confirmation statement deadlines.
How do I determine the corporation tax deadline for my company?
Your deadline depends on the size of a company, which is usually pegged on the taxable profits over an accounting period as shown below:
a. Taxable profits of more than £1.5 million (Large Company)
A company is large if its profits for a particular accounting period are more than £1.5 million but less than £20 million. In such a case, the company will pay its tax by instalments unless:
- The amount of its total liability for the accounting period is less than £10,000 (or when the accounting period is less than 12 months, less than an annual rate of £10,000)
- Its profits for the accounting period are no more than £10 million and either:
- For any accounting period ending in the previous 12 months, its annual profit rate was no more than £1.5 million, or its annual tax liability rate was no more than £10,000.
- It did not exist or did not have an accounting period at any time during the previous 12 months.
If either of these conditions apply, the company must pay its tax in full by the standard payment due date.
b. Annual taxable profits are over £20 million (Very Large)
A very large company is one whose profits for the accounting period in question are at a yearly rate of more than £20 million. It must pay corporation tax in installments rather than make a single payment.
The £20 million threshold is reduced if a company’s accounting period is shorter than 12 months or if it has associated companies under its control.
- Adjustment for Companies with Associated Companies: If a company has associated companies, the threshold is divided by the total number of associated companies, including the company itself. Example: A company has three associated companies and its profits for the past 12-month accounting period are £6 million. The adjusted threshold is calculated as:
£20 million ÷ (3 + 1) = £5 million.
Since the company’s profits exceed £5 million, it must pay Corporation Tax in installments.
- Adjustment for Accounting Periods Shorter than 12 Months: If a company’s accounting period is shorter than 12 months, the £20 million threshold is reduced proportionally. Example: A company has no associated companies but its accounting period is only six months. The adjusted threshold is calculated as:
£20 million × (6 ÷ 12) = £10 million.
If its profits exceed £10 million, it is classified as very large and must pay in installments.
Can I delay my corporation tax payment?
No, you cannot delay paying your Corporation Tax. If you miss the payment deadline, HMRC may immediately refer your case to the enforcement team. You will also face penalties from the first day of arrears as follows:
- 1 day late – £100 fine
- 3 months late – Another £100 fine
- 6 months late – 10% of the unpaid tax added as a penalty
- 12 months late – Another 10% penalty on the remaining unpaid tax
If you cannot pay on time, contacting HMRC to negotiate a Time to Pay (TTP) agreement is best. HMRC will assess your disposable income and, in most cases, ask you to pay 75% of it toward clearing the arrears.
Ignoring the debt could result in interest charges, enforcement action, or legal recovery. If you think you’ll struggle to pay, contacting us early can help avoid escalating penalty.
How do I pay Corporation Tax liability?
Each Corporation Tax payment method has a different processing time. To avoid late payments, choose a method that aligns with your deadline and ensures timely processing.
| Processing Time | Payment Method |
|---|---|
| Same day or next day |
|
| Within 3 working days |
|
| Within 5 working days |
|
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