Frequently asked questions: Corporation Tax in the UK

As you may know, filing Corporation Tax with HMRC and Companies House via the combined portal will be restricted from 31 March 2026.

From April 2026, you will need to use an HMRC recognised accounting software to submit your annual accounts and company tax returns directly to HMRC.

If you are getting ready for this change and want to understand Corporation Tax, final accounts, filing deadlines, and penalties better, our FAQ will help you prepare for the transition.

Will my company have to pay Corporation Tax?

Yes. If a company is registered as a limited company in the UK, it must pay Corporation Tax on all UK and foreign profits.

How do I register for Corporation Tax in the UK?

You can set up a limited company and register for Corporation Tax through the official HMRC website by following these steps:

1. Choose the type of limited company.

2. Appoint directors and, if required, a company secretary.

3. Decide on the shareholders or guarantors.

4. Identify people with significant control (PSC) over your company.

5. Prepare documents that outline how your company will be run.

6. Check and maintain accurate company records.

Register your company with Companies House.

What are the Corporation Tax rates?

The current Corporation Tax rates are:

• If your business profit is £50,000 or less, the Corporation Tax rate is 19% (small profits rate).

• If your business profit is £250,000 or more, the Corporation Tax rate is 25% (main rate).

• If your profit falls between £50,000 and £250,000, you may qualify for marginal relief from HMRC. This means your tax rate will vary depending on your profit, and you can calculate it using a marginal relief tax calculator.

• If your business does not qualify for marginal relief, your tax rate will gradually increase between 19% and 25%.

Note: Corporation Tax rates may vary if your company has associated companies. In this case, the £50,000 and £250,000 profit thresholds are divided by the total number of associated companies, including your own. This division may lower the levels at which the small profits rate and marginal relief apply.

What are statutory accounts, and who must file them in the UK?

Statutory accounts are a company’s annual accounts, prepared from its financial records at the end of the financial year. All limited companies, including dormant ones, as well as LLPs, must file their final accounts with Companies House.

How is taxable income calculated?

Taxable profit is calculated using the following formula:

(Turnover – Allowable Business Expenses) + Disallowable Expenses – Capital Allowances – Loss Relief

Do small and micro-entity companies have different reporting requirements in the UK?

Yes. If you are a small company, a micro-entity, or a dormant company, you can file simpler accounts with Companies House. These accounts do not need to be audited. For more information, visit the official website.

When am I considered a micro-entity?

Your company is considered a micro‑entity if it meets at least two of the following criteria:

• Turnover of £1 million or less

• Balance sheet total of £500,000 or less

• 10 employees or fewer

What are allowances and reliefs for Corporation Tax in the UK?

The following allowances and reliefs may apply to Corporation Tax in the UK.

• Capital allowances: You can claim capital allowances when you buy assets for business purposes, such as equipment, machinery, or business vehicles.

• Marginal relief: Your business may qualify for marginal relief if your taxable profits are between £50,000 and £250,000.

• Other reliefs you may be able to claim include:

• Research and development (R&D) relief

• The Patent Box (if you make profits from patented inventions)

• Creative industry tax relief (for profits from theatre, film, television, or video games)

• Goodwill and other relevant assets

• Disincorporation relief (if you are closing your company and becoming a sole trader, partnership, or limited partnership)

• Terminal, capital, and property income losses

Trading losses

What are the key deadlines to remember?

The key Final Accounts and Corporation Tax deadlines are:

Will there be penalties if I file my company tax returns late?

Yes, you will have to pay a penalty if you miss the Company Tax Return filing deadline. The penalties are:

Can I file UK Corporation Tax (CT600) directly through Zoho Books?

If you are a micro-entity limited company, you can file the CT600 to HMRC and submit your final accounts directly to Companies House through Zoho Books.