This is a tax charged on UK resident companies based on their profits. The Corporation Tax rate is set annually by the Government and is set to rise to 25% in April 2023. You must register your company for Corporation Tax with HMRC within 3 months of setting up the business.
Watch our video to learn more about Corporation Tax.
Each year a company is required to complete a Corporation tax return called a CT600 and file it online with HMRC. Normally this must be done within 12 months of the Company’s year end date. An important point to note is that BEFORE this 12 month filing deadline is reached, any Corporation tax due must be paid electronically to HMRC. This payment deadline is 9 months and 1 day after the end of the accounting period.
It is the responsibility of the DIRECTORS to ensure these deadlines are met and HMRC will issue penalties for late filing of the return or payment of any tax due.
What is in included in my Corporation Tax calculation?
A Company pays Corporation Tax on
- Profts from its trading activities
- Income from its investments
- Any chargeable gains from selling assets for more than they cost.
If the company is based in the UK it pays Corporation Tax on all its profits from both the UK and abroad.
What happens if I make a loss?
Any trading losses made by a company can be carried forward and offset against any future trading profits which reduces the future tax liability. Alternatively they can be set against the company’s TOTAL profits for a specified period. Even if the company has made a loss and has no payment to make a CT600 return must still be filed.