UK companies pay Corporation Tax on their profits. Profits up to £50,000 are taxed at the 19% small profits rate, profits over £250,000 at the 25% main rate, and profits in between at 25% reduced by marginal relief. Register within 3 months of starting to trade, file a Company Tax Return within 12 months of the period end, and pay within 9 months and 1 day.
Key points
- Small profits rate 19% (profits up to £50,000).
- Main rate 25% (profits over £250,000), with marginal relief in between.
- Limits are shared between associated companies and reduced for short periods.
- Register within 3 months of starting to trade.
Rates
| Taxable profits | Rate |
|---|---|
| Up to £50,000 | 19% (small profits rate) |
| £50,001 to £250,000 | 25% less marginal relief (effective rate between 19% and 25%) |
| Over £250,000 | 25% (main rate) |
These rates have applied since 1 April 2023. Check GOV.UK for the current year.
Registering and filing
- Register for Corporation Tax within 3 months of the company starting to do business (trading, buying, selling, renting property, employing people).
- Keep accounting records for every transaction.
- Prepare statutory accounts and a Company Tax Return (CT600) for each accounting period.
- Pay the tax by 9 months and 1 day after the period ends; file the return within 12 months.
Taking money out of the company
Owners usually pay themselves by salary (through payroll), dividends from taxed profits, or both. Each has different personal tax effects, which depend on where you live. Get advice before deciding.
Official sources
This guide is general information, not legal or tax advice. Rules and fees change; check the official sources above or speak to a UK accountant before you act.