Corporation Tax is paid by UK limited companies on taxable profits from trading, investments, and chargeable gains. Companies must register with HMRC, prepare annual accounts for Companies House, and file a Company Tax Return. This guide explains rates, deadlines, what to file, and how company tax differs from directors' personal Self Assessment.
Checked against GOV.UK guidance · last reviewed
Corporation Tax is a tax on the profits of UK limited companies and certain other organisations. Unlike Income Tax on personal earnings, it applies to the company as a separate legal entity.
A limited company pays Corporation Tax on profits made in an accounting period — usually the same 12 months as the company's financial year. Taxable profits include:
UK-resident companies pay Corporation Tax on profits from the UK and abroad. Non-UK companies with a UK branch or office pay only on UK profits.
HMRC does not send a Corporation Tax bill automatically. The company must calculate what it owes, pay on time, and file a return. Official guidance is on Corporation Tax overview.
Directors often confuse company tax with their own Self Assessment obligations. They are separate:
| Obligation | Who files | What it covers |
|---|---|---|
| Corporation Tax | The company (via directors or accountant) | Company profits |
| Company accounts | The company | Financial position filed at Companies House |
| Self Assessment | The director as an individual | Salary, dividends, benefits, and other personal income |
Paying Corporation Tax does not settle a director's personal tax bill. Dividends taken from post-tax profits are taxed separately through Self Assessment. See the limited company director Self Assessment guide for personal filing obligations.
The rate depends on how much profit the company makes in the accounting period. From 1 April 2023, the UK uses a tiered system:
| Profit level | Rate |
|---|---|
| £50,000 or less | 19% (small profits rate) |
| Between £50,000 and £250,000 | 19%–25% with marginal relief |
| More than £250,000 | 25% (main rate) |
The £50,000 and £250,000 thresholds are reduced proportionately for short accounting periods and when the company has associated companies.
Rates are set per financial year starting 1 April. If an accounting period straddles two financial years, tax is calculated by splitting profits across the days each rate applied.
Full rate tables are on Corporation Tax rates.
When a company is registered at Companies House, it can usually be set up for Corporation Tax at the same time. If not, directors must add Corporation Tax services to the company's business tax account on GOV.UK.
Registration should happen within three months of starting to do business — including buying, selling, advertising, renting premises, or employing someone. "Starting to do business" is broader than receiving first payment.
After registration, HMRC issues a letter with the company's Unique Taxpayer Reference (UTR). This is different from a director's personal UTR. The company UTR is needed to file returns and make payments.
Companies that are not trading are usually dormant for Corporation Tax. Dormant companies still have filing obligations with Companies House and may need to tell HMRC they have no tax to pay.
After each financial year, a private limited company faces four main deadlines. The accounting period for Corporation Tax normally matches the financial year covered by the annual accounts.
| Action | Deadline | Authority |
|---|---|---|
| File first accounts with Companies House | 21 months after incorporation | Companies House |
| File annual accounts with Companies House | 9 months after financial year end | Companies House |
| Pay Corporation Tax (or tell HMRC nothing is owed) | 9 months and 1 day after accounting period end | HMRC |
| File Company Tax Return (CT600) | 12 months after accounting period end | HMRC |
Payment is due before the return filing deadline. A company can owe tax and still have up to three extra months to submit the return.
If the deadline falls on a weekend or bank holiday, payment must reach HMRC on the last working day before it (unless paying by Faster Payments).
Every limited company — including dormant companies — must file annual accounts at Companies House. Accounts show the company's financial performance and position and are a public record.
Private companies file statutory annual accounts prepared to UK accounting standards. Smaller companies may qualify for reduced disclosure (filleted or micro-entity accounts) if they meet size thresholds.
Accounts must be acceptable — meeting legal requirements — on the date they are delivered. The clock starts when Companies House receives compliant accounts, not when they are posted.
The first accounts period may be longer than 12 months. First accounts are due within 21 months of incorporation, or three months after the accounting reference date, whichever is longer.
Guidance on preparing and filing is on Accounts and tax returns for private limited companies.
Companies House imposes automatic penalties for late accounts:
| How late | Private company penalty |
|---|---|
| Up to 1 month | £150 |
| 1 to 3 months | £375 |
| 3 to 6 months | £750 |
| More than 6 months | £1,500 |
Penalties apply even if the company is dormant or not trading. Full tables are in Late filing penalties from Companies House.
If HMRC issues a notice to deliver a Company Tax Return, the company has a legal obligation to file. The return is made up of:
The person signing the return must declare it is correct and complete. Inaccurate returns can lead to penalties and, in serious cases, prosecution.
Company Tax Returns must be filed electronically for accounting periods ending after 31 March 2010. Accounts and computations must be in iXBRL (Inline eXtensible Business Reporting Language) format.
From 1 April 2026, HMRC's free online filing service closed. Companies must now use commercial software to file CT600 returns, computations, and accounts with HMRC. Companies House accounts can still be filed through third-party software, web services, or paper in some cases.
Guidance on the service closure is on Filing company accounts and tax returns if you previously used the HMRC online service.
Full filing obligations are on Company Tax Return obligations.
HMRC charges penalties for late Company Tax Returns even when no tax is owed. Penalties increase the longer the return is overdue. Interest accrues on late Corporation Tax payments.
Pay Corporation Tax 9 months and 1 day after the accounting period ends. Use the company's 17-character Corporation Tax payment reference for the relevant accounting period.
Payment methods include online banking (Faster Payments, CHAPS, Bacs), Direct Debit, debit or corporate credit card, and approved online bank account payments. Corporation Tax cannot be paid by post.
Details are on Pay your Corporation Tax bill.
Larger companies pay in instalments. The rules differ for profits between £1.5 million and £20 million, and above £20 million. Instalments are due during the accounting period, before the final balancing payment.
Companies can reduce taxable profit through allowances and reliefs, including:
Relief rules are detailed and change with each Budget. Tax computations in the Company Tax Return must show how each relief was claimed.
A company is dormant for Corporation Tax when it is not trading and has no other income, such as investments. Dormant companies must still:
Restarting trading after dormancy triggers new registration and filing steps with both Companies House and HMRC.
VAT and Corporation Tax are separate. A VAT-registered company files VAT returns on its own quarterly or annual cycle. VAT charged and reclaimed affects cashflow but is not itself Corporation Tax profit — though VAT on purchases may affect expense deductions depending on whether input VAT is reclaimed.
See the VAT guide for UK businesses for registration thresholds and return obligations.
Corporation Tax involves company law, accounting standards, and tax legislation. Most limited companies use an accountant to prepare accounts, computations, and returns. Accountants can also advise on salary versus dividend extraction, R&D claims, and associated company rules.
For official rules, use the HMRC and Companies House sources linked at the bottom of this page.
HMRC has published a collection of videos and webinars to help sole traders and landlords prepare for Making Tax Digital (MTD) for Income Tax, covering.
Sole traders and landlords earning over £50,000 must submit their first Making Tax Digital (MTD) for Income Tax quarterly update by 7 August 2026.
HMRC has updated its guidance on commercial software suppliers that can be used to submit Self Assessment tax returns, supplementary pages and attachments.
Independent guidance. Not affiliated with HMRC or GOV.UK.
HMRC Tax Info is independent guidance, not tax, legal or financial advice, and is not affiliated with, endorsed by, or connected to HMRC or GOV.UK. Always check GOV.UK or speak to a qualified accountant or tax adviser for your own circumstances.