A Complete Guide to UK Corporation Tax Rates and Deadlines

Corporation Tax is one of the most significant business taxes in the UK—and one that’s often misunderstood or overlooked until deadlines loom. Misjudging your liabilities or missing critical dates can result in costly penalties and cash flow headaches. This guide walks you through every detail: current rates, how profits are calculated, key deadlines, how to pay, common pitfalls, and practical steps to stay compliant. If you run or plan to run a limited company in the UK, this is the essential, up-to-date guide you need.

Corporation Tax is a tax on the profits of companies and certain other organisations, such as clubs, societies, and some associations. In the UK, if you operate as a limited company, you are legally required to pay Corporation Tax on your taxable profits. Sole traders and traditional partnerships do not pay Corporation Tax; instead, they pay Income Tax on their business profits via Self Assessment.

As a director of a limited company, it’s your responsibility to ensure the business registers for Corporation Tax with HMRC, calculates its tax due, files a Company Tax Return, and pays the liability on time. Even dormant companies may have filing and notification obligations, depending on their status and whether they had any profit-generating activity in the accounting period.

Corporation Tax is also payable by non-UK companies that have a permanent establishment (such as a branch or office) in the UK, but this guide focuses on small UK companies. If you’re unsure whether your organisation needs to pay Corporation Tax, check the latest guidance on GOV.UK or seek professional advice, as getting this wrong can have serious financial and legal consequences.

As of the 2026/27 tax year, Corporation Tax rates in the UK are based on a company’s annual taxable profits, due to changes introduced from April 2023. The main rate is 25% for companies with profits over £250,000. However, there is a 'small profits rate' of 19% for companies with profits of up to £50,000. For those with profits between £50,001 and £250,000, a system of marginal relief applies, resulting in a gradual increase in the effective tax rate.

The thresholds are not as simple as they seem if your company is part of a group or has associated companies. In such cases, the £50,000 and £250,000 thresholds are divided by the number of associated companies, which can dramatically reduce the amount of profit taxed at the lower rate. It’s also important to note that these thresholds and rates apply to a 12-month accounting period; if your period is shorter or longer, they must be adjusted proportionally.

For companies in specific industries (such as oil and gas or banking), additional rates and surcharges may apply, but for the vast majority of small companies, the rates above are the ones that matter. Always keep up to date via GOV.UK, as rates can change with government Budgets.

You must register your company for Corporation Tax with HMRC within three months of starting to do business—this means any activity with a view to profit, not just making your first sale. Registration is typically done online, using your company’s Unique Taxpayer Reference (UTR), which HMRC issues shortly after your company is incorporated with Companies House.

Failing to register on time is a common mistake for new business owners, especially if you’re not actively trading immediately after incorporation. It’s crucial to register as soon as you start any business activity, such as buying stock, advertising, or even negotiating contracts. If in doubt, err on the side of caution and register early.

Once registered, HMRC will expect a Company Tax Return (CT600) to be filed for every accounting period—even if your company made no profit or is dormant, unless HMRC specifically tells you otherwise. Setting up reminders and using accounting software early can help ensure you don’t miss these obligations.

Corporation Tax deadlines are strict and can trip up even experienced business owners. There are two main deadlines to remember: the payment deadline and the filing deadline. Unlike other taxes, they are not the same date.

You must pay your Corporation Tax 9 months and 1 day after the end of your accounting period (which is usually your company’s financial year). For example, if your accounting period ends on 31 March 2024, your tax payment is due by 1 January 2025.

You must file your Company Tax Return (CT600), including your annual accounts and tax computations, 12 months after the end of your accounting period. However, HMRC expects most companies to file earlier, as you can’t pay your tax without knowing the final amount due. Late filing and late payment both incur separate, escalating penalties.

• Set calendar reminders for both payment and filing deadlines as they are not the same.
• Late payment incurs interest at HMRC’s published rate (currently 7.75% as of June 2026).
• You cannot pay Corporation Tax by cheque unless you have specific HMRC clearance.
• Penalties are separate for late filing and late payment—both can apply simultaneously.
• If your company’s year end changes, check how this affects your deadlines.

Corporation Tax is charged on your company’s taxable profits. This includes trading profits, investment income (such as bank interest), and chargeable gains (profits from selling assets). The calculation starts with your company’s profit as per your statutory accounts, then adjusts for allowable and disallowable expenses, capital allowances, and any reliefs or losses carried forward.

Common allowable expenses include salaries, rent, business insurance, and utility costs. However, not all business expenses are allowable for Corporation Tax—for example, client entertainment and most fines are disallowed. Getting your expense classifications wrong can lead to underpayment or costly HMRC enquiries.

You can also claim capital allowances on certain business assets, such as computers, machinery, and vehicles. The Annual Investment Allowance (AIA) lets you deduct up to £1 million per year on qualifying purchases. Additionally, companies may claim reliefs such as R&D tax credits, Patent Box relief, and relief for trading losses. These can significantly reduce your tax bill if used correctly.

• Trading profits: income from your main business activity, minus allowable expenses.
• Investment income: interest, rents, and dividends (UK companies do not usually pay tax on dividends from other UK companies).
• Chargeable gains: profits on selling assets, after deducting allowable costs.
• Add back disallowable expenses (e.g. entertainment, certain legal costs).
• Deduct capital allowances and other reliefs (e.g. R&D, AIA).

Filing your Company Tax Return (CT600) is done online via HMRC’s Corporation Tax portal. You’ll need to prepare detailed company accounts, tax computations, and complete the CT600 form. Most small companies use commercial accounting software or an accountant to prepare and file these documents, as HMRC’s own free software is limited in functionality.

Payment of Corporation Tax can be made by bank transfer (Faster Payments, CHAPS, or Bacs), direct debit, or online card payment. Each method has its own processing times, and it’s your responsibility to ensure payment clears HMRC’s account by the due date. Payment reference numbers are critical—always use your 17-character Corporation Tax reference to avoid misallocation.

Best practice is to prepare your accounts and draft tax computation well before the deadlines. This gives you time to spot errors, claim all available reliefs, and manage your cash flow. If you’re using an accountant, agree timelines and review all documents before submission, as the legal responsibility for accurate filing remains with the company directors.

• Always check and use your 17-character Corporation Tax reference for payments.
• Allow 3 working days for Bacs payments and 1 working day for Faster Payments or CHAPS.
• File early if possible—delays can lead to missed relief opportunities and cash flow issues.
• Keep digital and paper copies of all submissions for at least 6 years.
• If you discover an error after filing, you can amend your return within 12 months of the filing deadline.

HMRC is strict about Corporation Tax compliance. Penalties apply for both late filing and late payment, and interest is charged from the day after the payment deadline until the tax is paid in full. The penalties escalate quickly, especially for repeat offenders or those who are significantly late.

The most common mistakes small business owners make include missing deadlines, using the wrong reference when making payments, misunderstanding what expenses are allowable, and failing to account for associated companies when applying the small profits rate thresholds. These errors can lead to underpaid tax, HMRC enquiries, and sometimes even personal liability for directors.

It’s also a mistake to think that filing accounts with Companies House is the same as filing your Company Tax Return. These are separate processes with different content and deadlines. Always confirm both have been completed each year.

If your company is part of a group or has 'associated companies' (broadly, companies under common control), the thresholds for the small profits rate and main rate are divided by the total number of associated companies. For example, if you control two companies, each will only get £25,000 at the 19% rate and £125,000 at the marginal relief taper band.

Changing your company’s accounting period can alter your Corporation Tax deadlines and the calculation of thresholds for small profits and main rates. You must notify both Companies House and HMRC if you change your accounting reference date. HMRC may issue two tax returns for accounting periods that straddle a tax year or rate change, requiring careful apportionment of profits and tax rates.

Group companies can sometimes surrender losses between them using 'group relief', and may also need to consider transfer pricing and special reporting if trading with overseas subsidiaries. These areas are complex and usually require professional advice, but small business owners should be aware of the basics to avoid costly errors.

• Divide profit thresholds by the number of associated companies for tax rate purposes.
• Notify both HMRC and Companies House if you change your company’s accounting period.
• Prepare for the possibility of multiple tax returns if your period straddles two financial years.
• Seek advice on group relief and transfer pricing if you trade within a group.
• Always review the impact of group structure on your tax rates and deadlines.

Corporation Tax can seem daunting, but many questions crop up repeatedly among small business owners. Here are concise answers to the most common queries.

Do I have to pay Corporation Tax if my company made a loss? You still need to file a return even if you made a loss. You won’t pay tax if there are no taxable profits, but you may be able to carry losses forward to offset against future profits, reducing future tax bills.

Can I file my Company Tax Return myself? Yes, but most small businesses use an accountant or commercial software for accuracy and to maximise reliefs. HMRC’s free software is limited and not suitable for all company types.

What happens if I close my company? You must file a final Company Tax Return and pay any outstanding tax before the company is struck off the Companies House register. HMRC will issue a final tax calculation.

• Tax is due 9 months + 1 day after your period end, even if you file your return later.
• You need a Government Gateway account to file online.
• Dormant companies may not need to file a return, but HMRC must confirm this.
• You can amend your return up to 12 months after the filing deadline.
• Interest on late payments is not negotiable—plan for prompt payment.