Corporation tax is charged on your company's taxable profits. The rate depends on profit size, and the deadlines catch many new companies out.
Rates
- Small profits rate, 19%: profits up to £50,000.
- Main rate, 25%: profits over £250,000.
- Marginal relief: profits between £50,000 and £250,000 pay the main rate less a relief, giving an effective rate that rises from 19% to 25%.
The limits are divided by the number of associated companies (companies under common control) and reduced for accounting periods shorter than 12 months. Two associated companies each get a £25,000 lower limit.
Deadlines
- Pay: 9 months and 1 day after the end of the accounting period.
- File the CT600 return: 12 months after the end of the period.
- File accounts at Companies House: 9 months after the year-end for private companies (21 months for the first accounts).
- Large companies with profits over £1.5 million pay in quarterly instalments during the year.
Ways to reduce the bill legitimately
- Claim capital allowances, including the Annual Investment Allowance on plant and machinery and full expensing for qualifying spend.
- Review R&D relief if you develop new products or processes.
- Make employer pension contributions, which are usually deductible.
- Time large purchases with your accounting period in mind.
How we help
We prepare year-end accounts and corporation tax computations for your accountant or directors to review and file. Estimate your bill with our UK corporation tax calculator, or see our year-end accounts service.
