Corporation Tax
Overview
Corporation Tax is a tax your company or association pays to HM Revenue and Customs (HMRC) on profits in an ‘accounting period’. The amount you pay depends on how much profit you make. You may be able to get allowances and reliefs.
You must pay Corporation Tax on profits from doing business as a:
- limited company
- foreign company with a UK branch or office (also known as an ‘overseas company’)
- club, co-operative or other unincorporated association, for example a community group or sports club
You do not get a bill for Corporation Tax. There are specific things you must do to work out, pay and report your tax.
Profits you pay Corporation Tax on
Taxable profits for Corporation Tax include the money your company or association makes from:
- doing business (‘trading profits’)
- investments
- selling assets for more than they cost (‘chargeable gains’)
If your company is classed as UK resident for tax purposes, it pays Corporation Tax on all its profits from the UK and abroad.
If your company is not classed as UK resident for tax purposes but has an office or branch here, it only pays Corporation Tax on profits from its UK activities.
Manage your Corporation Tax
You need to add Corporation Tax services to your business tax account to manage your Corporation Tax online.
If you are a club, cooperative or other unincorporated association, you need to register for Corporation Tax first.
If your company is not doing business, it is usually ‘dormant’ for Corporation Tax.