Company Tax Returns

What is Corporation Tax?

Corporation is a company tax that must be paid on you companies profits from doing business as a Limited Company, any foreign company with a UK branch or office a club, co-operative or other unincorporated association.

Profits you pay Corporation Tax on:

Taxable profits for Corporation Tax include the money your company or association makes from:

If your company is based in the UK, it pays Corporation Tax on all its profits from the UK and abroad. If your company is not based in the UK but has an office or branch here, it only pays Corporation Tax on profits from its UK activities

UK Corporation Tax rates for 2024/25

Small profits rate	19%	Profits under £50,000
Main rate (eligible for Marginal Relief)	25%	Profits between £50,000 and £250,000
Main rate (not eligible for Marginal Relief)	25%	Profits over £250,000

The £50,000 threshold is known as the lower limit and the £250,000 threshold is known as the upper limit. The upper and lower limits are apportioned according to the number of companies which are Associated for Corporation Tax.

The limits are also apportioned for short accounting periods.

The marginal relief calculation from 1 April 2023

When adjusted ‘Augmented’ profits fall between the Lower and Upper limits, Marginal relief is given by reducing the 25% Corporation Tax charge by:

Fraction x (Upper Limit – Augmented Profits) x Taxable Total Profits/Augmented Profits

In the legislation it is described as: F x (U-A) x N/A

U = Upper limit
A = Augmented profits
N = Taxable total profits
F = Standard marginal relief fraction (3/200)

What are Augmented profits?

Augmented Profits are Taxable Total Profits plus exempt income from dividends or distributions but excluding dividends from 51% group companies.
See Calculating Corporation Tax: At a glance

Do I need to file Corporation Tax Returns?

Your company or association must file a Company Tax Return if you get a notice to deliver a Company Tax Return’ from HM Revenue and Customs (HMRC). You must still send a return if you make a loss or have no Corporation Tax to pay.

When to file Corporation Tax Returns?

Your private limited company must prepare Corporation Tax Return after the end of its financial year. You need your accounts and tax return to meet deadlines for filing with Companies House and HM Revenue and Customs (HMRC). You can also use them to work out how much Corporation Tax to pay.

Action	Deadline
File first accounts with Companies House	21 months after the date you registered with Companies House
File annual accounts with Companies House	9 months after your company’s financial year ends
Pay Corporation Tax or tell HMRC that your limited company does not owe any	9 months and 1 day after your ‘accounting period’ for Corporation Tax ends
Complete a simplified EC Sales List	£106,500 or less and supplies to EU countries of £11,000 or less.
File a Company Tax Return	12 months after your accounting period for Corporation Tax ends

Your accounting period for Corporation Tax is the time covered by your Company Tax Return. It’s normally the same 12 months as the company financial year covered by your annual accounts.

How to file the Corporation Tax Returns?

You must have the followings before preparing and filing Corporation tax Return online.

You can only use the paper form (CT600) if either:

You must also fill in and post form WT1 to explain why you’ve used the paper form.

Deadlines:

the deadline for your tx return is 12 months after the end of the accounting period it covers. You’ll have to pay a penalty for late filling if you miss the deadline.

There’s separate deadline to pay your corporation Tax bill. It’s usually 9 months and one day after the end of the accounting period.

Penalties for late filing:

You’ll have to pay penalties if you do not file your Company Tax Return by the deadline.

Time after your deadline	Penalty
1 day	£100
3 months	Another £100
6 months	HM Revenue and Customs (HMRC) will estimate your Corporation Tax bill and add a penalty of 10% to the unpaid tax
12 months	Another 10% of any unpaid tax

If your tax return is late 3 times in a row, the £100 penalties are increased to £500 each.

If your Tax Return is more than 6 months late:

If your tax return is 6 months late, HMRC will write telling you how much Corporation Tax they think you have to pay. This is called a ‘tax determination’. You cannot appeal against it.

You must pay the Corporation Tax due and file your tax return. HMRC will recalculate the interest and penalties you need to pay.

If you have a reasonable excuse, you can appeal against a late filing penalty by writing to your company’s Corporation Tax office.

Check recent tax forms or letters from HMRC for your Corporation Tax office address or call the Corporation Tax helpline.

Making Changes:

You must usually make any changes (‘amendments’) within 12 months of the filing deadline. You can:

You may be able to make changes to your Company Tax Return using HM Revenue and Customs (HMRC) online services. HMRC may charge you a penalty for errors.

Your company or association may be ‘dormant’ if it’s not doing business (‘trading’) and doesn’t have any other income, for example investments.

Dormant means different things for:

Corporation Tax and Company Tax Returns
Annual accounts and returns for Companies House if you have a limited company

Dormant for Corporation Tax?

Your company is usually dormant for Corporation Tax if it:

Has stopped trading and has no other income, for example investments
Is a new limited company that hasn’t started trading
Is an unincorporated association or club owing less than £100 Corporation Tax
Is a flat management company

Trading includes buying, selling, renting property, advertising, employing someone or getting interest. HMRC has detailed guidance on what counts as dormant for Corporation Tax.

Seek Professional Advice

Corporation Tax is a key part of running a business in the UK. It’s determined by your profits from trading, investments, and selling assets. It’s a fairly complicated process, but grasping your Corporation Tax responsibilities is vital for ensuring your business stays compliant and continues to grow.

That’s where we come in at Tx Accountants Ltd. We’re here to make your life easier by ensuring your tax returns are filed on time, and your tax bill is kept as low as possible. Our team takes care of all the tricky details—calculating your taxes, handling deadlines, and making sure everything is accurate—so you don’t have to worry.

If your business has grown, operates overseas, or just needs a helping hand with taxes, we’ve got you covered. Reach out to us at info@txaccountants.co.uk, and we’ll provide tailored advice and support to meet your needs. Let us handle the stress of tax compliance while you focus on what you do best—growing your business!

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