How does UK corporation tax work?
A UK company pays corporation tax on its taxable profits for each accounting period, and the rate is set by HMRC. The company files a company tax return and pays by a deadline tied to the end of that period.
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How it works
Taxable profit starts from accounting profit and is adjusted for items the tax rules treat differently, such as depreciation and certain expenses. Reliefs and allowances reduce the amount, and losses can be carried under set rules.
Commonly mixed up with
Corporation tax and the director's personal tax are separate. Salary and dividends are taxed at the individual level in addition.
How does UK corporation tax work?
| Knowledge, London | Business and finance |
|---|---|
| Short answer | A UK company pays corporation tax on its taxable profits for each accounting period, and the rate is set by HMRC. The company files a company tax return and pays by a deadline tied to the end of that period. |
| How it works | Taxable profit starts from accounting profit and is adjusted for items the tax rules treat differently, such as depreciation and certain expenses. Reliefs and allowances reduce the amount, and losses can be carried under set rules. |
| Commonly mixed up with | Corporation tax and the director's personal tax are separate. Salary and dividends are taxed at the individual level in addition. |
| Last reviewed | 2026-08-08 |
Short questions
- What is the rate?
- HMRC publishes current rates and any small profit rate.
- When is it due?
- Payment is due after the accounting period ends, before the return deadline.
- Do dormant companies pay?
- A dormant company with no taxable profit still has filing duties.
- Are losses usable?
- Losses may be carried under conditions set in the rules.
- Where is the guidance?
- HMRC publishes corporation tax guidance.
Sources
More in this track
- How do you register a company in the UK?
- Can a foreign founder open a UK business bank account?
- When does a UK business have to register for VAT?
- What does an employer need before hiring in the UK?
- What decides office costs in London?
- What accounts must a UK company file?
- Why is London a financial centre?
- What is the difference between a business visit and working in the UK?
- Branch or subsidiary: how does a foreign company enter the UK?
These pages explain how the rules work and link the authority that owns them. They are not legal, tax or immigration advice, and amounts and thresholds change, so open the source before you act.
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