UK limited companies are subject to Corporation Tax which is charged as a percentage of the taxable profits made by the company during the accounting period (usually a year).
Corporation Tax can also apply to other types of organisations, even if they are not incorporated, such as members’ clubs, societies and associations. Sole Traders and partnerships do not pay Corporation Tax – they pay tax on their business profits through the annual self-assessment system.
The current rate for UK Corporation Tax is 19% (2017/18). A Corporation Tax Return may be submitted any time between the date of your company year end and your statutory filing date. This is typically the latest of 12 months after the end of your year end, or 3 months after you get a notice to deliver a return – if in doubt, check!
If a corporation tax return is submitted late, or the contents are inaccurate, the company will be charged a penalty. If the company has made a taxable profit of up to £1.5 million, the corporation tax must be paid by 9 months and 1 day after the end of the accounting year. For example, if your accounting year end is 31st December, then your corporation tax payment will be due by 1st October of the following year.
It’s important to note this separate deadline to pay any corporation tax due – this can often trip people up.
If you’d like to discuss how we can support you with your company, get in touch to arrange a free consultation.
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