GlossaryUK
What is Corporation Tax?
UK tax on company profits, paid to HMRC
Short answer
Corporation Tax is the tax UK companies pay to HMRC on their profits for each accounting period. HMRC does not send a bill: the company works out the tax itself, reports it on its return (CT600) and pays it.
Explained
A UK-resident company pays on profits from the UK and abroad; a foreign company with a UK branch pays only on its UK profits. The company adds Corporation Tax services to its HMRC online account when it starts to do business, which can usually be done when the company is set up.
Companies with profits below a set limit pay 9 months and 1 day after the end of the accounting period; larger profits are paid in instalments. The return (CT600) is due 12 months after the period ends. You cannot pay Corporation Tax by post.
Good to know
- Taxable profit is different from the profit or loss shown in the annual accounts.
- HMRC posts the activation code for Corporation Tax services to the company’s registered address.
- Rates and limits change; check HMRC for the current figures.
This page is general information, not legal or tax advice. Rules change; check the official source for the latest position or talk to us.
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