Introduction to Corporation Tax

When your company or organisation pays Corporation Tax - paying, reporting, and dormant companies.

You must pay Corporation Tax on profits from doing business as:

a limited company
any foreign company with a UK branch or office
a club, co-operative or other unincorporated association, eg, a community group or sports club

You don’t get a bill for Corporation Tax. There are specific things you must do to work out, pay and report your tax.

Register for Corporation Tax when you start doing business or restart a dormant business. Unincorporated associations must write to HMRC.
Keep accounting records and prepare a Company Tax Return to work out how much Corporation Tax to pay.
Pay Corporation Tax or report if you have nothing to pay by your deadline - this is usually 9 months and 1 day after the end of your ‘accounting period’.
File your Company Tax Return by your deadline - this is usually 12 months after the end of your accounting period.

Your accounting period is normally the same 12 months as the financial year covered by your annual accounts.

Profits you pay Corporation Tax on

Taxable profits for Corporation Tax include the money your company or association makes from:

doing business (‘trading profits’)
investments
selling assets for more than they cost (‘chargeable gains’)

If your company is classed as UK resident for tax purposes, it pays Corporation Tax on all its profits from the UK and abroad.

If your company is not classed as UK resident for tax purposes but has an office or branch here, it only pays Corporation Tax on profits from its UK activities.

Register for Corporation Tax

You’ll need to register your company with Companies House. You’ll get the option to be set up for Corporation Tax at the same time.

If you do not set up Corporation Tax at the same time as registering your company, you’ll need to add Corporation Tax services to your business tax account. You will then be able to manage your Corporation Tax online.

If you are a club, cooperative or other unincorporated association, you need to register for Corporation Tax a different way.

If your company is not doing business, it is usually ‘dormant’ for Corporation Tax.

Work out your Corporation Tax

You do not get a bill for Corporation Tax. You must:

keep company and accounting records about your business
prepare a Company Tax Return to work out how much Corporation Tax to pay
pay Corporation Tax or report if you have nothing to pay by your deadline
file your Company Tax Return even if you make a loss or have no Corporation Tax to pay

You’ll have to pay penalties if you do not file your Company Tax Return by the deadline. You may be charged interest if you pay your Corporation Tax late.