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Understanding Corporation Tax in the UK: A Comprehensive Guide

Welcome to our comprehensive guide on corporation tax in the UK. At Affinity Outsourcing, we understand the complexities of this important tax category. In this blog, we aim to provide you with in-depth knowledge and insights into corporation tax, helping you navigate through its various aspects and optimize your tax planning strategies. First, let’s understand what is corporation tax in the UK

What is Corporation Tax in the UK?

Corporation tax is applicable to all businesses in the UK based on their annual profits. It operates in a manner similar to personal income tax. Since April 2016, the corporate tax rate for all limited liability firms in the UK has been 19%. However, for the 2023-2024 tax years, the rate has increased to 25%.

Unlike individuals, companies in the UK do not enjoy tax exemptions. Therefore, their entire profits are subject to taxation, depending on their earnings. Nevertheless, there are strategies available to reduce your tax liability and increase savings. It is essential to submit the annual company tax returns using the CT600 form to HMRC. Continue reading to gain a better understanding of how to calculate corporation tax for your business, file a corporation tax return, and discover additional insights. If you have any doubts or questions, or want to learn more about corporate tax, then feel free to contact us.

Who is Supposed to Pay Corporate Taxes in the UK?

The primary responsibility for paying corporate taxes lies with all limited liability corporations in the UK. Additionally, clubs, associations, business groups, housing associations, cooperatives, and similar entities are also liable to pay corporate tax if they are formally organized. However, sole proprietorships and partnerships are not subject to corporation tax. To know more about corporate taxes for your business in the UK, please feel free to contact Affinity Outsourcing. We offer free telephonic consultations to our clients.

To report your income and pay income tax based on your earnings, you are required to file a self-assessment tax return. If the company employs an accountant to handle the corporate tax calculation, it is still the director’s responsibility to ensure that the corporate tax returns are filed on time and the taxes are paid accordingly. Do you need help related to corporate tax for your business? Call our experts today at 020 3794 0514 or share your details with us using the contact us form on the website.

How to Register Your Business with HMRC?

When starting a business in the UK, it is crucial to notify HMRC within three months of commencing operations that your company is a limited liability corporation. It is important to familiarize yourself with the specific requirements related to your industry. The official HMRC website provides comprehensive information about various types of businesses, including active, trading, non-trading, and dormant.

Once you have determined the type of business you have, providing the necessary information becomes easier. During the registration process with HMRC, you will be required to provide certain details, including the start date of your business operations, the company name and registration number, the location of your company headquarters, the category of your enterprise, the annual closing date for your financial statements, as well as the name and address of the director, among other pertinent information. Need expert help in registering your business? Talk to us at 020 3794 0514.

How to Submit CT600 in the UK?

Unlike individuals who receive automatic tax bills generated by HMRC, businesses have the sole responsibility of determining their corporate tax liability. It is crucial for businesses to file their corporate tax returns, also known as CT600 forms, on an annual basis. Filing the annual accounts with both HMRC and Companies House is essential, as it discloses important filing information for all limited liability businesses.

Submitting the CT600 forms electronically is the preferred method, although in exceptional cases, paper submissions are allowed. However, those opting for paper filing must include the WT1 form, explaining the reason for not being able to submit the return online. When submitting the CT600 form, ensure that it includes the following details: business name and registration number, registered office address, tax reference number, revenue and profits, tax estimations, exemptions, and any other relevant information.

About Corporate Tax Due Dates in the UK

The due dates for filing corporate taxes in the UK depend on the fiscal year-end and the legislative requirements. The statutory filing date falls either 12 months after the year-end or three months after receiving a notification from HMRC to deliver a return. It is important to note that your business tax bill must be settled before filing your return.

If your company’s profits are up to 1.5 million euros, you are required to pay corporation tax within nine months and one day after the end of the financial year. For example, if your fiscal year ends on March 31st, you should submit your tax returns and pay your corporate tax by January 1st of the following year. However, companies with annual revenues exceeding 1.5 million euros are obligated to make quarterly payments of the corporation tax.

Options for Paying Corporation Tax in the UK

There are various methods available to fulfill your corporation tax obligations. Regardless of the method chosen, it is crucial to ensure that the payment reaches HMRC before the due date to avoid penalties. If the payment due date falls on a weekend or holiday, it is advisable to make the payment on the previous business day.

Here are some possible due dates for HMRC payments

  • Same-day or next-day payment: Use faster payment options such as CHAPS or e-banking to make immediate or next-day payments.
  • Payment at your local bank: You can visit your local bank and make the payment, allowing for a processing time of three business days.
  • Set up a direct debit: By setting up a direct debit, you can automate your payments and ensure they are made on time.
  • Online payment: Utilize the online payment facility to submit your corporation tax payment within the designated time frame.
  • Direct debit option: This option provides a window of five business days to complete the payment.

Choose the payment method that best suits your needs and ensures timely submission of your corporation tax payment to HMRC.

What are the Benefits of Effective Corporation Tax Planning?

Effective corporation tax planning can offer numerous benefits to businesses, including:

  • Reduced Tax Liabilities: By strategically managing deductions and utilizing available reliefs, companies can minimize their tax burdens and retain more profits within the organization.
  • Enhanced Cash Flow: Optimized tax planning allows businesses to allocate funds towards growth, innovation, and investment initiatives, fostering long-term sustainability and competitiveness.
  • Compliance with Tax Regulations: Staying up-to-date with the latest tax legislation ensures that companies comply with their legal obligations, avoiding penalties and potential reputational risks.
  • Tax Incentives and Reliefs: Understanding the various tax incentives and reliefs available can help businesses leverage opportunities to support research and development, investment in green technologies, and other eligible activities.
Contact Affinity Outsourcing to Learn More About Corporate Tax in the UK

Navigating the complexities of corporation tax is crucial for businesses aiming to maintain financial stability and maximize profitability. By comprehensively understanding the key elements and intricacies of this tax category, companies can optimize their tax planning strategies and effectively manage their tax liabilities.

At Affinity Outsourcing, we specialize in providing expert advice and assistance in all areas of corporation tax. Our team of experienced professionals can help accounting firms in the UK navigate through the ever-changing tax landscape and ensure your tax planning aligns with your business goals. Contact us today to learn more about our services and how we can support your corporation tax needs. You can like our Facebook page and follow us on Twitter to learn more about corporate taxes in the UK.


Understanding Corporation Tax in the UK: A Comprehensive Guide. Learn more about The Corporation Tax rate in the UK. Help and support are available.