Corporation Tax 101

For new and growing businesses, navigating the corporation tax landscape can feel like deciphering a complex puzzle. But don't fret, we're going to break down the essentials of corporation tax, making it easy to understand who needs to pay, what rates apply, and when those crucial deadlines are. ​

Business owners trading as a sole trader or partnership are not liable for corporation tax as they pay personal income tax on their profits (or their share of the profits).​

For accounting periods beginning on or after 1 April 2026:​

These thresholds and rates remain unchanged from recent years following the 2025 Autumn Budget and the UK's ongoing tax roadmap commitments. ​

This is usually the last day of the month your company was incorporated. You can change it later if another year-end date works better for your business. Some common year-end dates are 31 December (for businesses wanting to operate on a typical calendar year) or 31 March (for businesses wanting to operate on a fiscal year that runs close to the UK tax year).​

Statutory accounts must be filed with Companies House within nine months of the accounting period end. ​

Corporation tax is due nine months and one day after the end of the accounting period.​

The CT600 must be submitted to HMRC within 12 months of the end of the accounting period, even if the tax has already been paid.​

The Confirmation Statement must be filed within 14 days of the review date to keep company details up to date. ​

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Example​

If your company's year-end date was 31 December 2025, your deadlines would be:​

To complete your corporation tax return you'll need the following documentation:​

When filing your corporation tax return, there are numerous allowances and tax reliefs that can be deducted to reduce your taxable income and therefore the corresponding tax liability.​

You can claim most business-related expenses.​

The golden rule is that they must be related to generating revenue.​

Some common deductions include:​

It’s important to note that not all expenses are deductible for corporation tax. For example, entertainment costs or fines are not deductible.​

Capital allowances let companies deduct the cost of certain assets, such as equipment and machinery, over time (sometimes referred to as depreciation).​

From 2026, changes to capital allowance rules affect how quickly some investments can be written off for tax purposes. These include adjustments to writing-down allowances and the introduction of new first-year allowances for certain types of expenditure, alongside the continued availability of the Annual Investment Allowance. ​

These changes will affect timing, which can influence when it makes sense to invest in assets. For companies planning equipment purchases, professional advice becomes even more important. ​

Visit HMRC’s website for more information on corporation allowances and reliefs.​

You generally have three options:​

At Beany, our online process includes a guided questionnaire that integrates with some accounting software (like Xero) to reduce the amount of questions you need to answer.​

If you file yourself, HMRC will review your return and issue a corporation tax calculation. ​

If you work with an accountant, they will: ​

The timeframe depends on a number of factors, from time of year to whether you’re self-filing or using an accountant.​

If you submit via HMRC you’ll typically have your corporation tax return confirmed immediately or within 72 hours.​

With an accountant, it can take 8-14 weeks once you’ve provided all your information. Outside the busy season, it’s often much faster.​

Once your accounts have been finalised, you’ll be informed of the amount owing or whether you’re due a refund.​

HMRC will issue a Notice of Assessment with your corporation tax liability.​

Tax obligations can vary based on business structure, whether you’re registered for VAT, if you have employees, among other things.​

Learn more: tax responsibilities for limited companies.​

You can choose to register via post, through an accountant, or online. ​

To register for corporation tax, you’ll need:​

Visit HMRC’s website for more information.​

If you’ve incurred a loss: Filing a Corporation tax return when your business has incurred a loss allows you to carry the loss forward i.e. you’re able to offset the current year’s loss against future profits to reduce your tax liability in the following year, provided you meet certain tests.​

If you weren’t trading: You need to file a nil return to stay compliant. This lets HMRC know that your business is still active, even if you didn’t trade.​

You can usually amend your corporation tax return through HMRC or your accountant. If you’ve forgotten something that HMRC will be able to track back to you or your business, it’s best to correct it before they contact you as penalties may apply if they discover an error first.​

If you miss the filing deadline, HMRC usually applies an automatic £100 penalty. Further penalties may apply after 3 months, 6 months and beyond this point.​

If you file on time but do not pay by the deadline, HMRC may charge interest and apply late payment penalties that increase the longer the balance remains unpaid. ​

If you know you won't be able to pay your tax bill in time, it's important to act early. In many cases, HMRC will allow a Time to Pay arrangement, letting you spread payments over an agreed period. An accountant can help you assess your options and communicate with HMRC if needed. ​

You can choose to pay your corporation tax through one of the following ways:​

If the payment due date falls on a public holiday or weekend, it’s your responsibility to make sure the payment clears before the deadline. If you miss the deadline, you may need to pay interest on your bill.​

Beany supports UK limited companies with corporation tax, statutory accounts, and ongoing compliance. With fixed pricing, clear guidance, and online support, we make corporation tax simpler and easier to manage.​

Get in touch to see how Beany can help you stay compliant and confident at tax time.​