You need to pay Corporation Tax as soon as
your business starts making profits
All UK limited companies pay Corporation Tax on their profits. Corporation Tax is a bit like Income Tax for companies, but the difference is that companies don’t have a personal allowance. This means that as soon as your business starts making a profit, it needs to start paying Corporation Tax at the Corporation Tax rate (unless it’s previously made losses). The Corporation Tax rate for company profits is currently set at 19 per cent.
When is Corporation Tax due?
This is where it gets tricky, because the Corporation Tax filing deadline differs from other taxes. You need to pay Corporation Tax before you file your company tax return and the date you need to pay it depends on your company’s Corporation Tax accounting period.
The deadline to pay your Corporation Tax bill is nine months and one day after the end of your accounting period for your previous financial year, so if your accounting period ends on 31 March, your Corporation Tax deadline is 1 January.
But you need to prepare your company tax return to work out how much Corporation Tax to pay, and the deadline to file your company tax return is 12 months after the end of the accounting period it covers.
Remembering all this can be quite a burden for small businesses; it makes sense to leave this to a professional who can take the burden away by completing and filing your return, so that you don’t have to worry about deadlines and can concentrate on what’s important - you and your business.