Corporation tax

Corporation tax

Corporation tax is a tax applied on a company’s taxable profit.

Taxable profits include profits made by the organisation or association from:

● Trading activities
● Investing activities
● Any other income generated

You must maintain accounting records and compute annual profits after any deductions and allowances.

Who has to pay corporation tax?

Corporation tax applies on the following companies:

● Companies with UK branch
● Limited company
● Club, Co-operative, e.g., sports club, community groups

When to register for corporation tax?

● Register for corporation tax with the HMRC within three months of incorporation.
● Usually, it is a simultaneous process when you set up a new company in the UK.

What do I need to register for corporation tax?

To register to pay with HMRC, you need:

● Company registration number
● Trading starting date
● Financial year-end

What are submission and payment timelines?
  • Nine months and one day to pay the tax
  • Twelve months to submit a corporation tax return (CT600)

What happens if I don’t submit a corporation tax return?

Penalties apply for late submission of a corporation tax return.

Delay after deadlinePenalty
One day£100  
Three monthsAdditional £100  
Six months10% of the estimated unpaid tax  
Twelve monthsAdditional 10% of any unpaid tax  

What happens if I don’t pay corporation tax?

There are separate penalties and interest charges for late payment. HMRC has the power to appoint debt collection agencies, take you to court, cease assets, file for bankruptcy, take money from your bank account, wages or pension. 

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