A Guide to Corporation Tax
15/01/2021
This guide is all things Corporation Tax. It will walk you through what this type of tax is, how to register, using your Unique Taxpayer Reference (UTR), our top tips and more.
What is Corporation Tax?
Corporation Tax is a tax that is payable from all taxable profits of a company based in the UK, no matter where in the world the profit was generated. Corporation Tax is calculated and paid annually based on your 'Corporation Tax accounting period', which is usually the same as your company's financial year.
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, e.g. 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. Most companies register for Corporation Tax and PAYE as an employer at the same time as registering with Companies House.
- If you’ve already registered, sign in to HMRC online services to file your company tax return or make a payment. If you do not have an online services account, you can create one when you sign in.
You’ll need to register for Corporation Tax separately if you registered your company by post, using an agent or if you are using third-party software.
Register within 3 months of starting to do business. You can check if you’re unsure what counts as starting to do business. You may get a penalty if you register late.
How to Register
To register for Corporation Tax online, you’ll need your company’s Government Gateway user ID and password to log in.
If you do not have a user ID, you can create one when you first use the service.
You’ll also need your company’s 10-digit Unique Taxpayer Reference (UTR). This is posted to your company address by HM Revenue and Customs (HMRC) within 14 days of the company being registered with Companies House (incorporated).
If you did not get a UTR after registering your company, you can request one through the government website.
When registering you’ll need to tell HMRC:
- your company’s registration number
- the date you started to do business (your company’s first accounting period will start from this date)
- the date your annual accounts are made up to
What Happens Next?
HMRC will tell you the deadline for paying Corporation Tax.
You’ll need to file a Company Tax Return, even if you make a loss or have no Corporation Tax to pay.
Finding Your UTR in the Future
Your 10-digit UTR will be on all letters from HMRC and within online services. You need it:
if you contact HMRC about Corporation Tax
to send your Company Tax Return using commercial software
Profits and Corporation Tax
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 based in the UK, it pays Corporation Tax on all its profits from the UK and abroad.
If your company isn’t based in the UK but has an office or branch here, it only pays Corporation Tax on profits from its UK activities.
Corporation Tax Tips
- 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.
- Stopping business: if you’re not doing business you may qualify as ‘dormant’. Click here if you’re restarting a business.
Get Help
If you need help with Corporation Tax, you can:
- appoint an accountant or tax adviser to help you - you can find an accountant accredited in the UK
- contact the helpline
Related Guides
A Guide to Expenses for a Limited Company
That’s Corporation Tax. Not too bad right? Check out the Knowledge Hub for more helpful guides on all things tax and business.
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