What is Corporation Tax?

What is corporation tax

What is Corporation Tax?

Corporation tax a tax paid by limited companies.  Self employed individuals do not need to pay corporation tax.

Corporation tax is paid on paid on company profits – all income less all business expenses, before dividends drawn.

What is the Corporation Tax Rate?

The corporation tax rate for 2017 is 19%.

Corporation Tax Allowances and Reliefs

As well as deducting business expenses to reduce taxable profits, allowances & reliefs exist which can also reduce corporation tax.  Examples of these allowances are:

  • Capital Allowances
  • Research and Development
  • Trading losses

When is Corporation Tax Due?

UK businesses must submit a CT600 to HMRC annually. This form contains company income, expenses and any claims for allowances or reliefs. Corporation tax is due 9 months and 1 day after a limited company’s year end. It should be paid before this deadline to avoid a fine.

How Do You Pay Corporation Tax?

Corporation tax can be paid in all the usual ways such as:

  • Bank transfer
  • BACS
  • Credit Card
  • Direct debit

HMRC lists out the exact process of how to pay corporation tax using your chosen method HERE.