If you run a limited company in the UK, understanding Corporation Tax is essential. It’s one of the most important financial responsibilities company directors face — and getting it wrong can lead to penalties, unnecessary tax bills, and extra stress.
At JSR Management, we are an accountancy practice specialising in helping businesses across the UK stay compliant with HMRC while optimising their tax position. In this guide, we explain what Corporation Tax is, who pays it, and how our accountants can support your company.
What Is Corporation Tax?
Corporation Tax is a tax charged on the profits of limited companies and some other organisations, such as clubs, co-operatives, and trade associations. Unlike Income Tax, there is no personal allowance — companies pay Corporation Tax on all taxable profits.
Who Needs to Pay Corporation Tax?
You must pay Corporation Tax if you are:
- A limited company registered in the UK
- A foreign company with a UK branch or office
- An unincorporated association such as a club or society
Sole traders and partnerships do not pay Corporation Tax — instead, they pay Income Tax on business profits.
Current Corporation Tax Rates
From 1 April 2023, Corporation Tax rates in the UK are:
- 19% for companies with profits of £50,000 or less
- 25% for companies with profits over £250,000
- Marginal Relief applies to profits between £50,001 and £250,000, creating a tapered rate between 19% and 25%
At JSR, our accountants calculate your exact liability and ensure you benefit from all available allowances and reliefs.
What Counts as Taxable Profits?
Corporation Tax applies to profits from:
- Trading (ordinary business activities)
- Investments (e.g. rental income from company-owned property)
- Chargeable gains (profits from selling company assets)
Corporation Tax Deadlines
Company directors are legally responsible for ensuring their business pays Corporation Tax on time. Key deadlines include:
- Registering for Corporation Tax: Within 3 months of starting trading
- Filing a Company Tax Return (CT600): Within 12 months of your company’s year end
- Paying Corporation Tax: Within 9 months and 1 day of your company’s year end
Late filing or late payment can result in HMRC penalties and interest charges.
Allowable Expenses and Reliefs
Companies can reduce their Corporation Tax bill by claiming allowable expenses and reliefs, including:
- Business expenses (salaries, office costs, professional fees)
- Capital allowances on equipment and machinery
- Research & Development (R&D) tax relief
- Annual Investment Allowance (AIA)
- Loss reliefs carried forward or back
At JSR, we ensure your company claims every relief available, keeping your tax bill as low as possible.
Why Work with JSR for Corporation Tax?
Corporation Tax can be complex, especially as your business grows. At JSR Management, our specialist accountants provide:
- Registration with HMRC for Corporation Tax
- Preparation and submission of your Company Tax Return (CT600)
- Tax planning to minimise your liability
- Guidance on allowable expenses and reliefs
- Ongoing support to keep your business compliant and tax-efficient
By partnering with us, you can be confident that your Corporation Tax is handled correctly — while you focus on running your company.
Final Thoughts
Corporation Tax is a major responsibility for every limited company in the UK. With expert advice and tailored support from JSR, you can ensure your business remains compliant with HMRC and takes advantage of every available tax relief.
FAQs on Corporation Tax in the UK
When is Corporation Tax due?
Corporation Tax must be paid within 9 months and 1 day after the end of your company’s accounting period. The Company Tax Return (CT600) must be filed within 12 months of the year end.
Can I reduce my Corporation Tax bill?
Yes. You can reduce your Corporation Tax liability by claiming allowable expenses, capital allowances, and reliefs such as R&D tax credits and Annual Investment Allowance. An accountant can ensure you don’t miss out.
Do all companies have to pay Corporation Tax?
All UK limited companies are liable for Corporation Tax on their profits. However, if your company makes a loss, no Corporation Tax is due — though you must still file a return.
What happens if I file Corporation Tax late?
Late filing or payment leads to HMRC penalties and interest charges. The longer the delay, the higher the penalty. Working with an accountant helps you avoid unnecessary fines.
Do I need an accountant for Corporation Tax?
While it’s possible to file your own return, most directors choose to use an accountant. Professional support ensures accuracy, compliance, and effective tax planning.
