Corporation Tax UK is a tax on the profits of limited companies and other organisations. For 2026, the main rate is 25% on profits over £250,000 and the small profits rate is 19% up to £50,000, with marginal relief in between. Tax is due 9 months and 1 day after the accounting period ends.
Corporation tax is an important element of business taxation in the United Kingdom, impacting businesses of all sizes. Understanding its workings is essential for businesses to remain compliant and optimise their financial strategies. This guide covers 2026 rates, deadlines, allowable expenses, the CT600, penalties and ways to reduce a client’s bill, written for large UK practices.
For large practices managing many clients, a clear grasp of Corporation Tax UK rules helps you meet obligations on time, limit penalty exposure across your client portfolio and identify legitimate tax savings.
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HMRC Corporation Tax All Contact Details In One Place
- HMRC corporation tax phone numbers, online access, and postal contact details
- Key information and documents to keep ready before contacting HMRC
- Practical tips to reduce waiting times and speed up query resolution
What is Corporation Tax in the UK, and Who Pays it?
Corporation tax is a tax on the taxable profits of limited companies, foreign companies with a UK branch or office, and clubs, co-operatives or other unincorporated associations. It is charged on profits for each accounting period, not on turnover.
Corporations based in the UK must pay corporation tax, for which they must file a Company Tax Return (CT600). Usually, most corporations and businesses opt to appoint an accounting practice like yours to do the tax return and other tasks related to corporation tax. However, if you want to reduce your workload, you can outsource corporation tax to a professional and experienced outsourcing service provider. Corient provides corporation tax outsourcing to UK accountancy firms, backed by AI Crew tools such as Sherlock for error detection.
How to Register for Corporation Tax with HMRC?
A company must register for corporation tax with HMRC within three months of starting business activity. Your clients whose businesses are based in the UK have only three months from the start of operations to inform the HMRC. Once your clients are clear about their business type, they will provide information without any problem. Some of the information required by the HMRC is the starting date of the business operations, the company’s name, the registration number, the location of the main office, and the annual closing date of your financial statements.
What is the UK Corporation Tax Rate in 2026?
The UK corporation tax main rate is 25% for profits over £250,000, and the small profits rate is 19% for profits of £50,000 or less. Profits between £50,000 and £250,000 pay the main rate reduced by marginal relief, which is a deduction that tapers the effective rate between 19% and 25%.
These rates have applied since 1 April 2023. However, these corporation tax rates are subject to change.
| Taxable profits | Rate | Note |
| £50,000 or less | 19% | Small profits rate |
| £50,001 to £250,000 | 25% less marginal relief | Effective rate tapers between 19% and 25% |
| Over £250,000 | 25% | Main rate |
Source: GOV.UK, Corporation Tax rates, checked 6 October 2026. The £50,000 and £250,000 limits are proportionately reduced for short accounting periods and by the number of associated companies, which matters for group clients. See also our Corporation Tax Rates 2026 guide.
When Does Corporation Tax Have to Be Paid?
Corporation tax is due 9 months and 1 day after the end of the accounting period when taxable profits are up to £1.5 million. Companies with taxable profits above £1.5 million must pay in instalments.
Your clients are required to pay tax or report if your client has nothing to pay by the deadline – which is usually 9 months and 1 day after the end of your accounting period. The deadline to file the company tax return is usually 12 months after the end of your client’s accounting period. These deadlines are subject to change, so please visit the HMRC website for current information.
| Item | Deadline |
| Pay corporation tax (profits up to £1.5 million) | 9 months and 1 day after the accounting period ends |
| Pay in instalments (profits above £1.5 million) | During the accounting period; see GOV.UK rules for £1.5m to £20m and over £20m |
| File the Company Tax Return (CT600) | 12 months after the accounting period ends |
| Example: year end 31 December 2026 | Pay by 1 October 2027; file by 31 December 2027 |
Source: GOV.UK, Pay your Corporation Tax bill, last updated 5 October 2026.
What Are the Corporation Tax UK Allowable and Disallowable Expenses?
Allowable expenses are costs incurred wholly and exclusively for running the business, and they reduce taxable profit. Disallowable expenses give a personal benefit or are capital in nature, so they cannot be deducted. Allowable expenses are those that your clients incur while running their business and can be claimed as tax deductions. These expenses are not taxable, and they will help your clients reduce how much they have to pay on their profits. Let’s understand allowable expenses better through an example: say your client’s company made £30,000 at the end of the year, and your client spent £5,000 on allowable business expenses. You wouldn’t have to pay tax on the entire £30,000. Instead, you’ll only pay tax on £25,000.
Some of the allowable costs are:
- Office, property, and equipment expenses
- Car, van, and travel expenses
- Staff expenses
- Uniform expenses
- Legal costs
- Marketing costs
- Training cost
On the other hand, disallowable costs are expenses incurred by your client while running their business but cannot be claimed for tax reductions in the UK. You will get clarity on this expense when you ask whether it is for running the business or giving your client a personal benefit. Expenses that provide personal benefits are disallowable expenses.
Some of the disallowable costs are:
- Personal loans
- Gifts and entertainment expenses done by clients on their customers
- Everyday office clothing
- Fines and penalties for non-compliance
- Donations made to charitable trusts or political parties
- Depreciation (claim capital allowances instead; see Corient’s capital allowance services)
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What Is the CT600 and Why Does It Matter?
The CT600 is the Company Tax Return form that UK companies file with HMRC to report profits and calculate corporation tax. It must be filed within 12 months of the end of the accounting period, even if no tax is due.
Companies work out their own corporation tax liability under Corporation Tax Self Assessment. It is their responsibility or your responsibility if they have delegated it to you, to file the CT600 forms every year. Statutory accounts are filed separately at Companies House; see Corient’s year-end accounts outsourcing
CT600 forms are part of the corporation tax return and must be submitted along with supporting documents to the HMRC. CT600 is submitted electronically, but it can be submitted in paper form in exceptional cases. If you submit them on paper, you must include WT1 to explain why you could not submit them online. The CT600 contains the following information: business name and registration number, registered office address, tax reference number, revenue and profits, tax estimations, exemptions, and so on. For the 2026 position on digital filing, read our guide to MTD for Corporation Tax.
Accounting outsourcing service providers offering corporation tax services handle such tasks perfectly. So, opt for these services if you are finding yourself overloaded. Checkout their case studies and find the best service provider that fulfils your requirements
What If Your Client Has No Tax Due?
Companies with no corporation tax to pay must still file a Company Tax Return, and should tell HMRC that no payment is due to stop payment reminders.
Corporate tax returns must be filed annually, even without corporation tax. The HMRC will send your clients payment reminders before the due date unless the nil-to-pay form is submitted. If your client’s business is inactive, you must inform the HMRC. When the HMRC is satisfied, a letter will be issued stating that no Company Tax Return is required while the company remains dormant for Corporation Tax.
How Do You Pay Corporation Tax to HMRC?
You can pay corporation tax to HMRC by online bank approval, Faster Payments, Bacs or CHAPS transfer, debit or corporate credit card, Direct Debit, or at your bank. You cannot pay by post, so allow time for the payment to clear before the deadline.
There are multiple ways to make corporation tax payments. You and your client must only worry about making the payments before the due date, or else your client will face penalties. If the deadline falls on a weekend or bank holiday, the payment must reach HMRC on the last working day before it, unless you pay by Faster Payments.
Here are some routes for making payments to HMRC
- For instant payment, you can opt for online banking options
- You can also make the payments at your local bank
- The direct debit option can also be used for making payments
| Payment method | Typical clearing time |
| Online bank approval, Faster Payments, CHAPS, debit or corporate credit card, at your bank | Same day or next day |
| Bacs, or Direct Debit already set up with HMRC | 3 working days |
| First-time Direct Debit | 5 working days |
Source: GOV.UK, Pay your Corporation Tax bill, last updated 5 October 2026.
What Are the Penalties for Late Filing and Late Payments of Corporation Tax?
HMRC charges £200 if a Company Tax Return is one day late and another £200 at three months, rising to £1,000 each if the return is late three times in a row. Late payment attracts interest, and returns over six months late also attract tax-geared penalties.
| Time after the filing deadline | Penalty |
| 1 day | £200 |
| 3 months | Another £200 |
| 6 months | HMRC estimates the tax bill and adds a penalty of 10% of the unpaid tax |
| 12 months | Another 10% of any unpaid tax |
| Late three times in a row | The £200 penalties rise to £1,000 each |
Source: GOV.UK, Penalties for late filing, last updated 30 September 2026.
Late filing of tax returns, payment of taxes, and giving false information will invite penalties from HMRC. Now, the regulatory agency decides on the penalties for late submissions of corporation tax returns, and these are subject to change. For the latest penalties, please visit GOV.UK.
Late Payments of Corporation Tax
Your client will be charged interest when they fail to pay corporation tax. Late payment interest is separate from late filing penalties.
False Information
While doing the corporation tax returns, if the information provided turns out to be false, it will attract penalties from HMRC. The penalty amount will depend on whether the mistake was intentional, whether there was an attempt to conceal the information or whether you admit to an error before the HMRC finds it. Check HMRC’s current guidance on GOV.UK before advising clients on error penalties.
How Can You Reduce a Corporation Tax Bill Legally?
You can legally reduce a corporation tax bill by claiming allowable expenses and capital allowances, paying director salaries and employer pension contributions as business costs, and paying tax early to earn repayment interest.
There are four ways you can suggest to your clients that they reduce corporation tax.
Claim Allowable Expenses
Expenses incurred by your client for running its business are considered allowable expenses. These expenses can be deducted from the profits, and then corporation tax can be charged. Thus, your clients will be liable for reduced corporation tax.
Company Owners Paying Themselves Salaries
The company earns profits, not the person working for it. So, the company’s owner, your client, can decide to pay themselves a salary. A salary comes under business expense, which reduces your client’s taxable profit. Salaries must be genuine remuneration for work done and processed through PAYE.
Making Contributions to Employer Pension
Employer pension contributions made by the company are generally deductible when calculating taxable profit.
Doing Early Payments to HMRC
If your clients pay corporation tax as soon as possible, HMRC will repay them some of it as interest at a rate that changes over time; see GOV.UK refund interest guidance.
What Are the Most Common Corporation Tax UK Questions?
Can You Reduce Corporation Tax in the UK?
Yes. Companies reduce corporation tax by claiming allowable expenses, capital allowances and available reliefs or tax credits, and by benefiting from the small profits rate or marginal relief where profits are below £250,000. Claims need supporting records, and expenses that give a personal benefit remain disallowable.
When is Corporation Tax due?
Corporation tax is due 9 months and 1 day after the accounting period ends when taxable profits are up to £1.5 million. The Company Tax Return is due 12 months after the period ends. Companies with profits above £1.5 million pay in instalments, and short or extended accounting periods can change the dates.
What are allowable expenses for Corporation Tax?
Allowable expenses are costs incurred wholly and exclusively for running the business, such as staff wages, rent for business premises, utility bills, office supplies, legal costs, marketing, training and business travel. They are deducted from revenue to reach taxable profit. Fines, personal loans, client entertainment and depreciation are not deductible.
Can Corporation Tax be paid in instalments?
Companies with taxable profits above £1.5 million must pay corporation tax in instalments during the accounting period instead of waiting 9 months and 1 day. Companies with profits above £20 million follow the very large company rules, which bring payments forward. The £1.5 million limit is reduced where the company has associated companies.
Are dividends subject to Corporation Tax?
Dividends a UK company receives from other UK companies are generally exempt from corporation tax, so they are not added to taxable profits. Dividends a company pays to its own shareholders are not a deductible expense and do not reduce its taxable profits. Shareholders may pay personal income tax on dividends they receive.
What Are the Corporation Tax Rates in the UK for 2026?
The main rate is 25% for profits over £250,000, and the small profits rate is 19% for profits of £50,000 or less. Profits between those limits pay the main rate reduced by marginal relief. The limits are reduced for short accounting periods and for companies with associated companies, so groups should calculate them carefully.
What Are the Penalties for Filing a Company Tax Return Late?
HMRC charges £200 if a return is one day late and a further £200 after three months. If it is more than six months late, HMRC estimates the tax due and adds a 10% penalty, with another 10% at twelve months. Three consecutive late returns raise the fixed penalties to £1,000 each.
Conclusion
Corient supports UK accountancy firms with corporation tax outsourcing, year-end accounts, bookkeeping, payroll, audit and VAT services, using AI Crew tools alongside experienced accounting professionals.
This guide attempts to simplify the workings of corporation tax in the UK for accounting practices. It enables you to prepare better and serve your business clients more efficiently and proactively. If you still require assistance handling corporation or personal tax, you can approach Corient UK.
Corient UK has established itself as a trustworthy and professional outsourcing service provider for many accounting practices in the UK. Our tech-savvy accounting services, such as bookkeeping, payroll, year-end, corporation, audit, and VAT services, have streamlined the process for many accounting practices.
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