Corporation Tax
Corporation tax is the tax your limited company pays on its profits — broadly, sales minus allowable expenses. Sounds simple, but the rules around director's loans, allowable deductions and HMRC payment references generate a steady stream of questions. These guides cover how the bill is calculated, how to pay it, and the most common areas where directors get caught out.
Guides
Read our Corporation Tax guides
Plain-English walkthroughs of the most common questions clients ask.
- 1
What are capital allowances, the AIA, and how do they reduce my tax bill?
Limited companySole traderDirectorCapital allowances and the Annual Investment Allowance (AIA) are crucial tax reliefs that allow UK businesses to deduct the cost of certain asset purchases from their taxable profits, reducing their tax bill.
- 2
How do I close my company tax-efficiently using Business Asset Disposal Relief?
Limited companyDirectorClosing your limited company tax-efficiently often involves using Business Asset Disposal Relief (BADR) to reduce Capital Gains Tax on distributions, typically through a Members' Voluntary Liquidation (MVL).
- 3
How do I pay my Corporation Tax, when is it due, and how do I claim a refund?
Limited companyDirectorPaying your Corporation Tax involves understanding the correct payment methods, deadlines, and reference numbers, with a clear process available if you need to claim a refund for overpaid tax.
- 4
What are R&D Tax Credits and can my company claim them?
Limited companyDirectorR&D Tax Credits are a valuable UK government incentive designed to encourage innovation by reducing your company's Corporation Tax bill or providing a cash payment for qualifying research and development activities.
- 5
Should I be a sole trader or a limited company?
Sole traderLimited companyDirectorChoosing between operating as a sole trader or a limited company is a fundamental decision for UK business owners, impacting everything from tax to personal liability.
- 6
How is my company's Corporation Tax calculated and why does it change?
Limited companyDirectorYour company's Corporation Tax bill is calculated based on its taxable profits, applying specific rates and reliefs that can change due to various financial activities and government policy.
- 7
How is S455 tax calculated on a director's loan and how can it be avoided or reclaimed?
Limited companyDirectorS455 tax is a Corporation Tax charge on your company, applied to outstanding director's loans not repaid within 9 months and 1 day of your company's year-end.
Key facts
The headline figures
19%
Small profits rate
Profits up to £50,000 (2025/26)
25%
Main rate
Profits over £250,000 (2025/26)
26.5%
Marginal rate
Effective rate on profits between £50k and £250k
9 months + 1 day
Payment due
After the end of your accounting period
12 months
Filing deadline
Submit your CT600 within 12 months of period end
33.75%
S455 charge on director's loans
Tax on loans not repaid within 9 months 1 day of year-end
Annual cycle
Key dates and deadlines
The events you can't afford to miss in a typical year.
- Start of accounting period
Tax year begins
Usually 12 months. Could be shorter for a first or final year.
- End of accounting period
Profits crystallise
Your accountants prepare statutory accounts and the CT600 (corporation tax return).
- +9 months and 1 day
Corporation tax payment due
Pay HMRC. Use your 17-character reference for the right accounting period.
- +12 months
CT600 filing deadline
Submit your corporation tax return to HMRC. Late filing triggers automatic penalties.
- Within 3 months of starting
Tell HMRC you've started trading
Required even if you've already registered the company at Companies House. Form CT41G or via your business tax account.
Useful resources
Official tools and references
Sign in to file your CT600
Government Gateway entry to HMRC's online services.
gov.uk
Pay your Corporation Tax bill
Bank details, references and timing for HMRC corporation tax payments.
gov.uk
Find your accounting period dates
How accounting periods work — particularly for first/final years.
gov.uk
Corporation Tax rates
Current rates and historical archive.
gov.uk
Quick answers
Corporation Tax FAQs
How is corporation tax calculated?
What is S455 tax on director's loans?
When do I have to pay corporation tax in instalments?
Can I delay paying corporation tax if cash is tight?
What reliefs can reduce my corporation tax?
Need help with corporation tax?
Speak to a qualified accountant
Our team specialises in corporation tax for UK small businesses, contractors and landlords. No obligation, no sales pitch — just a clear answer to your specific situation.