Corporation Tax
Corporation Tax is the tax charged on the taxable profits of UK limited companies and some other organisations. The main rate is 25% for companies with profits over £250,000 (from April 2023), with a small profits rate of 19% for those with profits up to £50,000 and marginal relief between the two thresholds. Companies must file a Company Tax Return and pay any tax due within nine months and one day of their accounting period end.
For 2025/26, the main Corporation Tax rate remains 25% on profits over £250,000, with a small profits rate of 19% for profits up to £50,000. Marginal relief applies between the two thresholds, providing a tapered effective rate. Associated companies (those under common control) split these thresholds equally between them. Companies can reduce their tax bill through reliefs including the Annual Investment Allowance (£1 million per year for qualifying plant and machinery), R&D reliefs, and loss relief. A Company Tax Return (CT600) must be filed with HMRC within 12 months of the accounting period end; the tax itself must be paid within nine months and one day. Large companies with profits over £1.5 million pay by quarterly instalments. HMRC administers Corporation Tax; penalties apply for late filing and payment.