Understanding Corporation Tax

Corporation Tax is tax on the profits of a corporation: these taxes are paid on a company’s taxable income. As a business, you are responsible for making sure you are paying the right amount of tax, as you will not get a bill.

There are a number of things to think about when it comes to Corporation Tax, including preparing your accounts, working out the costs and filing your returns.

Businesses should work out, report, and pay Corporation Tax through these specific steps:

• Register for Corporation Tax as soon as you start doing business.
• Keep accounting records and prepare a Company Tax Return.
• Pay Corporation Tax by the deadline. (Usually 9 months and 1 day after the end of your accounting period’)
• File your Company Tax Return by your deadline (Usually 12 months after the end of your accounting period.)

Corporation Tax must be paid on profits earned by:

• A limited company
• A foreign company with a UK branch/officeA club, co-operative or other unincorporated association
• (including sports clubs or community groups)

Corporation Tax is to be paid on the following taxable profits:

• From doing business
• Investments
• Selling assets for more than they cost

Learn more about Corporation Tax