Corporation Tax UK —
Minimised Legally, Filed On Time

Corporation Tax must be paid to HMRC within 9 months and one day after the end of your accounting period. So for a company with a 31 December 2024 year end, Corporation Tax is due by 1 October 2025. The CT600 return must be filed within 12 months of the year end (31 December 2025 in this example). Large companies with profits above £1.5 million pay by quarterly instalments during the year. We calculate your payment dates at the start of each year and provide reminders in advance.

The UK Corporation Tax system has two rates from April 2023: the small profits rate of 19% applies to profits below £50,000; the main rate of 25% applies to profits above £250,000. Profits between £50,000 and £250,000 are taxed at the main rate with marginal relief, creating an effective rate that tapers between 19% and 25%. Associated companies (under common control) share the thresholds — so two associated companies each have a small profits threshold of £25,000, not £50,000.

The Annual Investment Allowance (AIA) allows companies to deduct the full cost of qualifying plant and machinery — computers, equipment, machinery, business vehicles (not cars), fixtures and fittings — up to £1 million per year from their taxable profits in the year of purchase. So a company buying £100,000 of qualifying equipment receives a £100,000 deduction from taxable profits in that year, saving £25,000 in Corporation Tax at the main rate. We identify all qualifying expenditure and maximise AIA claims.

Yes — if your company is undertaking qualifying research and development activity, you can claim R&D tax relief. Under the current regime (following Spring Budget 2024 reforms), most companies use a merged R&D scheme offering an enhanced deduction of 186% of qualifying expenditure, with a payable credit for loss-making companies. R&D-intensive SMEs (qualifying R&D expenditure above 30% of total expenditure) can access a higher payable credit rate. We assess R&D eligibility, prepare the technical narrative and manage the claim.

Missing the CT600 filing deadline triggers automatic HMRC penalties: £100 immediately, a further £100 if still not filed after 3 months, plus tax-geared penalties of 10% of the unpaid tax for returns more than 6 months late (20% after 12 months). HMRC also charges interest on late payment from the due date. We file CT600s well before the 12-month deadline for every client and have never incurred a late filing penalty.

Many companies claim only the most obvious plant and machinery allowances — missing integral features (electrical, plumbing, heating systems), fixtures, structures and buildings allowance, first-year allowances for energy-efficient equipment and annual investment allowance on items that should qualify. Unclaimed capital allowances in prior years can be claimed retrospectively via an amended CT600 for up to 4 years. We review capital allowances comprehensively for every client.

Large companies with profits above £1.5 million pay Corporation Tax by quarterly instalments during the accounting period — not 9 months after year end. Directors of fast-growing companies often don’t realise they’ve entered the instalment regime until they receive an HMRC interest charge for late payment. We track profit projections and alert clients when they’re approaching the large company threshold.

Companies within a group (under 75% common ownership) can surrender trading losses to other group members — allowing profitable group companies to reduce their CT liability using losses from less profitable members. Many business owners with multiple companies fail to consider group relief, leaving losses unused while other group companies pay CT unnecessarily. We review group relief opportunities for all clients with associated companies.

Companies with common 51% ownership are associated — sharing the CT thresholds (small profits rate threshold and marginal relief band) between them. A director with two companies often assumes each has a £50,000 small profits threshold — in fact they each have £25,000. Ignoring associated company status results in incorrect CT rate application and underpayment. We assess associated company status for all clients with multiple companies.