Corporation Tax Basics for Limited Companies
Corporation Tax is one of the main tax responsibilities for UK limited companies. It applies to taxable company profits, including trading profits, some investment income and chargeable gains.
Introduction
Directors should understand how Corporation Tax links to accounts, bookkeeping, payroll, VAT and director transactions.
This guide outlines what Corporation Tax is, typical rates, deadlines, what shapes taxable profit and common errors.
What is Corporation Tax?
Corporation Tax is paid by limited companies on taxable profits. The company calculates taxable profit, prepares a Company Tax Return and pays tax due to HMRC.
A Company Tax Return normally includes the CT600 form, company accounts and a Corporation Tax computation.
Corporation Tax rates
Rates and reliefs change — GOV.UK lists the small profits rate (commonly 19% where profits are below £50,000), the main rate (25% where profits exceed £250,000) and Marginal Relief between those limits. Verify current figures on GOV.UK before planning cash.
Filing and payment deadlines
A Company Tax Return is usually due 12 months after the end of the accounting period. Corporation Tax is usually payable 9 months and 1 day after the end of the accounting period (GOV.UK).
The tax payment date often arrives before the CT600 filing deadline, so finish accounts early.
What affects taxable profit?
Taxable profit is not always the same as accounting profit. Typical adjustments include:
- depreciation
- capital allowances
- disallowable expenses
- business entertaining
- private use adjustments
- losses
- gains
- timing differences
Corporation Tax should be calculated properly — not estimated from bank balance alone.
Common Corporation Tax mistakes
Late payment, late filing, weak bookkeeping, claiming personal costs, missing capital allowances, incorrect dividend treatment, unreconciled VAT and ignoring director loan account issues are frequent pitfalls.
How DepoTax can help
DepoTax supports limited companies with annual accounts, Corporation Tax returns, CT600 preparation, bookkeeping reviews, VAT reconciliation, payroll reconciliation and tax planning.
Frequently asked questionsFAQ
What is Corporation Tax?
It is tax on your limited company’s taxable profits. You calculate taxable profit, file a Company Tax Return (normally including CT600) and pay HMRC.
How do CT payment and filing deadlines relate?
Corporation Tax is usually payable 9 months and 1 day after your accounting period ends; the Company Tax Return is normally due 12 months after period end — check GOV.UK for your company’s dates.
Why is taxable profit different from accounting profit?
Adjustments apply for depreciation, capital allowances, disallowable costs, timing differences and other rules — CT should not be guessed from bank balance alone.
Does DepoTax prepare Corporation Tax returns?
Yes — annual accounts, CT computations, CT600 filings and bookkeeping reviews are part of limited company support.
Related DepoTax services
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