Knowledge Centre

Corporation Tax is the tax due on company profits. Once the accounting profit is worked out for a company, it is then turned into the taxable profit by adding back certain expenses that are not tax deductible and taking out certain capital allowances that act as tax reliefs and reduce the company's tax bill. This is a quite a complex process as there are literally thousands of rules regarding what you can and can not claim as tax deductible.

Corporation Tax Registration

A Limited Company has to register for Corporation Tax with HMRC. You must fill out the appropriate form and file it with HMRC. The 123 Way includes Corporation Tax registration.

Corporation Tax Rates

If your company’s taxable profit is £250,000 or more then the rate of Corporation tax is 25%.

If your company’s taxable profit is below £50,000 then the rate of Corporation Tax is 19%.

If your company’s taxable profit is between £50,000 and £250,000 then you will pay a tapered rate of Corporation Tax. In the vast majority of cases this will effectively be 19% for the first £50,000 of taxable profits and 26.5% for the slice of taxable profits between £50,000 and £250,000.

The effective Corporation Tax rate for different profit levels will be:

Profits Effective Corporation Tax  

£50,000  19.00%

£75,000  21.50%

£100,000  22.75%

£150,000  24.00%

£200,000  24.63%

£250,000 25.00%

Corporation Tax Responsibilities

A Limited Company must submit a Corporation Tax return each year. This is due 12 months after its company’s year end. So if the first company year end is 31 May 2023 then it will be due before 31 May 2024.

You also have to pay your Corporation Tax. This is due within 9 months and 1 day of the company year end. Using the example above you would need to pay this by 1 March 2024.

Corporation Tax is very important; there are a number of fines and penalties if you make any mistakes.


The 123 Way includes the working out of your company's taxable profit and the preparation and submission of your Corporation Tax Return and all supporting computations.