Finance & Banking
Understanding Corporation Tax
Everything you need to know about corporation tax rates, deadlines, and how to calculate what you owe.
By Free Business Registration Ltd · 1 min read
A company may owe Corporation Tax on taxable profits. The amount depends on its circumstances, available reliefs and the accounting period. Filing and payment are separate obligations, so check both deadlines with HMRC.
Corporation Tax Rates and Relief
- Small profits rate: 19% on profits up to £50,000
- Main rate: 25% on profits over £250,000
- Marginal relief may reduce the tax payable between these profit thresholds
- Effective rate varies with marginal relief
- Associated companies and short accounting periods can reduce the thresholds; eligibility conditions apply
What Counts as Profit
- Trading profits from business activities
- Investment income and gains
- Capital gains on asset sales
- Rental income from property
- Profits calculated after allowable expenses
- Different rules for different types of income
Key Deadlines
- File return within 12 months of accounting period end
- Pay tax within 9 months and 1 day
- Late filing penalties start at £100
- Interest charged on late payments
- Larger companies may need to pay Corporation Tax by instalments
- Keep records for at least 6 years
Official guidance
This is general guidance. Check the current official rules and get advice for your circumstances before making tax, legal or financial decisions.