Corporation Tax

Corporation tax, also known as company tax, is a tax paid by businesses based on their yearly profits. If you run a limited company, your tax rate will depend on your profits. The main rate of corporation tax in the UK has increased from 19% to 25% from April 2023 for companies with profits over £250,000. The rate for companies with profits of £50,000 or less remained at 19%, with a tapered rate for profits between £50,000 and £250,000.

Who needs to pay company tax?

It’s not only limited companies who pay this tax. Actually, you have to pay if you’re any of the following organisations and you make profit:

  • Any foreign company with a UK branch or office
  • A club
  • A co-operative
  • A community group
  • A sports club
  • Housing associations

How do I pay corporation tax?

Before you pay company tax, you need to register your company via Companies House and register to pay with HMRC. This is a single process unless you registered your company by post, with third-party software or using an agent. If you did any of these three things, you should register to pay corporation tax separately from when you register with Companies House.

Make sure that you pay your bill nine months and one day after the end of your accounting period.

What if I pay late?

If you pay your company tax bill late, HMRC has various powers to claim any money owed in the following ways:

  • Collect money from your wages or pension
  • Take you to court
  • Make you file for bankruptcy
  • Take money from your bank/building society account
  • Seize your assets to sell
  • Call the debt collectors on you

Essentially, if you don’t pay on time, HMRC’s powers are far-reaching. It’s best to get in contact with them as soon as you know you won’t be able to pay. They may let you set up a payment plan. Give them a call on 0300 200 3822.

What do I need to register for corporation tax?

To register to pay with HMRC, make sure you have these three things to hand:

  1. Your company’s registration number
  2. The date you started trading
  3. The date your annual accounts are made up to

Frequently Asked Questions

Search More Terms

News & Insights

Tax
1 week ago

Xero Accounting Services Can Benefit your Business

As a business owner, the more financial information you have access to, the better equipped you are, and Xero accounting...
As a business owner, the more financial information you have access to, the better equipped you are, and Xero accounting services can streamline the way you run your business.  Working with a Platinum Xero advisor like MJ Kane, m...
Case Study
3 weeks ago

Voluntary Disclosure for Limited Company X – Case Study

HMRC disclosure support is often difficult to find. Especially when you aren’t even sure how much you owe on your tax ...
HMRC disclosure support is often difficult to find. Especially when you aren’t even sure how much you owe on your tax position. Making a HMRC voluntary disclosure always seems to be a daunting task to people. However, its one of...
Tax
1 month ago

Corporate Tax Accountants

Keeping up with corporate affairs for a limited company can be a challenge especially with the complex tax legislation, ...
Keeping up with corporate affairs for a limited company can be a challenge especially with the complex tax legislation, alongside the employment laws and reporting requirements. As such it may be a good idea to outsource your comp...
Tax
1 month ago

Director Tax Accountants

It can be complicated for UK company directors to navigate their personal tax affairs whilst running their business. Wit...
It can be complicated for UK company directors to navigate their personal tax affairs whilst running their business. With complexities such as having multiple income streams and complicated tax legislation, it may make sense to ou...
Tax
1 month ago

Corporate Accounting Services for Your Limited Company

Running a limited company comes with its fair share of financial responsibilities. From keeping up with the latest tax r...
Running a limited company comes with its fair share of financial responsibilities. From keeping up with the latest tax regulations to ensuring you have enough cash to meet your liabilities for the month ahead, there’s a lot ...
Tax
2 months ago

Tax Preparation Services

You might believe that as a small company, you have limited things to worry about when it comes to preparing taxes, lead...
You might believe that as a small company, you have limited things to worry about when it comes to preparing taxes, leading you to do this yourself. If you know what you are doing and don’t make mistakes, there is nothing wrong ...
Tax
2 months ago

Small Business Accountant

When looking for an small business accountant, the best place to start is by reviewing exactly what services you need no...
When looking for an small business accountant, the best place to start is by reviewing exactly what services you need now and in the future. If you are starting out as a small business, then it may not make sense for you to pick a...
Load More View All

Subscribe Now

Receive our latest news & insights directly to your fingertips.