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.

Anita is a Chartered Accountant, turned blogger and creator of the ever popular free Go Self Employed Email Mini Course, which has been completed by hundreds of attendees all over the UK. Using her 10 years experience in accounting, tax and operations for Small Businesses, Anita is on a mission to make finance simple for the self employed, so they can stop stressing about tax & finances and focus on building profitable businesses which will give them the lifestyle they dream of.