Corporation Tax FAQs: 16 questions UK directors ask (2026)

In short: In 2026/27 a UK company pays Corporation Tax at 19% on profits up to £50,000 and 25% above £250,000, with marginal relief in between (GOV.UK: Corporation Tax rates). The tax is due 9 months and 1 day after the accounting period ends (GOV.UK), and the Company Tax Return (CT600) within 12 months (GOV.UK).

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Quick answers (checked against GOV.UK on 30 September 2026)

What is the Corporation Tax rate in 2026/27?

For the financial year starting 1 April 2026, the main rate is 25% on taxable profits over £250,000 and the small profits rate is 19% on profits up to £50,000 (GOV.UK: Corporation Tax rates). Profits in between pay 25% less marginal relief. The rates and marginal relief guide has the full table.

The figures match the financial year that started on 1 April 2025: the same 19% and 25% rates, the same £50,000 and £250,000 limits and the same 3/200 marginal relief fraction (GOV.UK: Corporation Tax rates). Both limits are divided between associated companies and reduced in proportion for an accounting period shorter than 12 months, so a company with a sister company, or a short first period, reaches the main rate on lower profits (GOV.UK: Marginal Relief for Corporation Tax). The rates apply to taxable profit, which is the accounts profit after tax adjustments. To work out a bill from the accounts, follow how to calculate Corporation Tax, step by step, or enter the figures in the Corporation Tax calculator.

What is marginal relief, and how does it work?

Marginal relief lowers the bill for a company whose taxable profits fall between £50,000 and £250,000: tax is worked out at 25%, then reduced by 3/200 of the gap between the profits and £250,000 (GOV.UK: Corporation Tax rates; CTA 2010 s.18B). For a 12-month period with no associated companies, £100,000 of profits gets £2,250 of relief, leaving tax of £22,750.

The worked figures assume a 12-month accounting period in the financial year starting 1 April 2026, no associated companies and no dividends received, so the company's augmented profits equal its taxable profits. Tax at the 25% main rate is £25,000. The gap to the £250,000 upper limit is £150,000, and 3/200 of £150,000 is £2,250, so the bill is £22,750, an effective rate of 22.75% (CTA 2010 s.18B). Inside the band, each extra £1 of profit costs 26.5p of tax, because the 25% charge rises while the relief shrinks by 1.5p. The limits are divided by the number of associated companies, counting your own: with 3 others they fall to £12,500 and £62,500 (GOV.UK: Marginal Relief for Corporation Tax). Check who counts in associated companies and your Corporation Tax thresholds, and see the rates and marginal relief guide for more examples.

When is Corporation Tax due?

Corporation Tax is due 9 months and 1 day after the accounting period ends, so a year ending 31 March 2026 must be paid by 1 January 2027 (GOV.UK: Pay your Corporation Tax bill). That date comes before the return's filing deadline. Corporation Tax deadlines explained sets out both dates side by side.

The payment date is fixed by the period end, not by when the return is filed. Filing early doesn't bring it forward, and filing late doesn't push it back: interest runs from the day after the due date until the tax is paid (GOV.UK: Corporation Tax interest charges). Larger companies pay sooner, because a company with taxable profits of more than £1.5 million pays in instalments, with different rules above £20 million (GOV.UK: Pay your Corporation Tax bill). An accounting period can't be longer than 12 months, so accounts covering a longer period, such as a first period of 15 months, need 2 returns, and each accounting period has its own payment date (GOV.UK: Accounting periods for Corporation Tax). The Corporation Tax deadline calculator works out the payment, CT600 and Companies House dates for any period end.

What is the deadline for filing a CT600?

The Company Tax Return (CT600) is due 12 months after the end of the accounting period it covers, so a year ending 31 March 2026 must be filed by 31 March 2027 (GOV.UK: Company Tax Returns). A late return due on or after 1 April 2026 gets an automatic £200 penalty, up from £100 (HMRC: late filing penalty increase).

The CT600 form is only part of the return. HMRC also expects the company's accounts and the tax computation, which most companies must send in iXBRL (GOV.UK: XBRL guide for businesses). The CT600 deadline is separate from the Companies House deadline, where a private company's annual accounts are due 9 months after its financial year ends, or 21 months after registration for its first accounts (GOV.UK: Accounts and tax returns for private limited companies). A company with a 31 March year end therefore files its accounts at Companies House by 31 December and its CT600 with HMRC by the following 31 March. Because the tax is due on 1 January, the figures behind the return are needed well before the CT600 deadline. If a return is late 3 times in a row, each £200 penalty rises to £1,000 (GOV.UK: late filing penalties), and the late filing guide lists every stage. The Corporation Tax deadline calculator shows all three dates for your own period.

What happens if I pay Corporation Tax late?

HMRC charges late payment interest on unpaid Corporation Tax from the day after the due date until it is paid, at 7.75% a year since 9 January 2026: the Bank of England base rate plus 4% (GOV.UK: HMRC interest rates). On £10,000 paid 30 days late, that is about £63.70. See how to pay Corporation Tax.

Late payment interest paid to HMRC is deductible for Corporation Tax in the accounting period in which it is incurred (GOV.UK: Corporation Tax interest charges). The rate follows the base rate: it was 8.00% from 27 August 2025 and fell to 7.75% on 9 January 2026 (GOV.UK: HMRC interest rates). Paying late and filing late are separate failures with separate costs. A company that files on time but pays late owes interest only; a company that also files late owes the automatic late filing penalties on top. Interest starts the day after the payment date of 9 months and 1 day, even though the return itself isn't due until 12 months after the period ends. The Corporation Tax penalty calculator works out the interest and any late filing penalties for your own dates.

How do I pay Corporation Tax, and what is the payment reference?

Pay HMRC directly, quoting the 17-character Corporation Tax payment reference for the accounting period being paid, which changes each period and is shown on the notice to deliver a return and in the company's HMRC online account (GOV.UK: Bank details). Faster Payments usually arrive the same or next day. See how to pay Corporation Tax.

For a bank transfer, pay the HMRC account named on the notice to deliver or a reminder; if unsure, GOV.UK says to use HMRC Cumbernauld, sort code 08 32 10 and account number 12001039 (GOV.UK: Bank details). CHAPS payments usually reach HMRC the same working day if sent within the bank's processing times, while Bacs payments usually take 3 working days, so leave time before the deadline. Because the reference changes every accounting period, copy the new one each time: GOV.UK says it is what makes sure the payment is allocated correctly. HMRC's reminders also show it. The same GOV.UK guide lists the other ways to pay, including Direct Debit, card and approving a payment through the company's online bank account, and explains how to tell HMRC when no payment is due (GOV.UK: Pay your Corporation Tax bill).

Do I have to file a CT600 if my company made no profit?

Yes, if HMRC has sent the company a notice to deliver a Company Tax Return: GOV.UK says you must still send a return if you make a loss or have no Corporation Tax to pay, within the usual 12 months (GOV.UK: Company Tax Returns). Filing records the loss for later years; see the loss schedule guide.

Does a dormant company pay Corporation Tax?

No. A company is usually dormant for Corporation Tax if it has stopped trading and has no other income, or is new and hasn't started trading, so it has no profits to tax. If HMRC sends a notice to deliver a Company Tax Return, it must still file one showing it was dormant (GOV.UK: Dormant for Corporation Tax).

Dormant for HMRC and dormant for Companies House are separate tests with separate duties, as the dormant company tax return guide explains. A company that is dormant for Corporation Tax can tell HMRC, and then it doesn't need to file returns unless HMRC sends another notice (GOV.UK: Dormant for Corporation Tax). Companies House is different: a dormant limited company must still file its annual accounts and its confirmation statement, though a small dormant company can file dormant accounts (GOV.UK: Dormant for Companies House). Those accounts are due 9 months after the financial year ends, as for any private company (GOV.UK: Accounts and tax returns for private limited companies). A company that starts trading again, or starts earning income such as interest, is no longer dormant. What to do when a dormant company starts trading covers the steps.

What expenses can reduce Corporation Tax?

Costs incurred wholly and exclusively for the company's trade reduce taxable profit, unless a specific rule blocks them (CTA 2009 s.54). The saving is a share of the cost: £1,000 of allowable expenses saves £190 at the 19% small profits rate or £250 at 25% (GOV.UK: rates). See the allowable expenses checklist.

Between £50,000 and £250,000 of taxable profits, the same £1,000 saves £265, because marginal relief makes each pound in that band cost 26.5p of tax (CTA 2010 s.18B). Equipment and other long-lasting purchases work differently from running costs. Capital allowances let a company deduct some or all of an item's value from its profits before tax (GOV.UK: Capital allowances), and the annual investment allowance covers qualifying plant and machinery of up to £1 million a year (GOV.UK: Annual Investment Allowance). So a laptop or a van usually reduces the tax bill through capital allowances rather than through the expense line in the accounts. Some business costs are blocked by a specific rule, client entertaining being the best-known example (CTA 2009 s.1298). Equipment purchases, depreciation and capital allowances explains how a purchase flows into the return.

Are dividends deductible for Corporation Tax?

No. The law allows no deduction for a dividend or other distribution when a company's profits are calculated for Corporation Tax (CTA 2009 s.1305), so paying a £10,000 dividend leaves the tax bill unchanged. A dividend is paid out of profits, not deducted in arriving at them. See are dividends a Corporation Tax expense?

The shareholder may pay tax on the dividend instead. For 2026/27, dividends above the £500 dividend allowance are taxed at 10.75%, 35.75% or 39.35%, depending on the shareholder's Income Tax band (GOV.UK: Tax on dividends). The company itself doesn't pay tax on a dividend payment, but it must not pay out more in dividends than its available profits from current and previous financial years (GOV.UK: Taking money out of a limited company). A director's salary is treated differently from a dividend, both for the company's Corporation Tax and for the director's own tax, so the mix matters. Director's salary or dividends compares the two with the 2026/27 figures.

Can a loss reduce Corporation Tax?

Yes. A trading loss can be set against the company's other profits of the same period, carried back against profits of the previous 12 months, or carried forward. Claims to use it in the same period or carry it back are due within 2 years of the loss period's end (GOV.UK: trading losses). See trading losses brought forward.

A carry-back only works if the company carried on the same trade in the earlier period, and it can mean a repayment of tax the company has already paid for that year (GOV.UK: Work out and claim relief from Corporation Tax trading losses). Losses made in accounting periods beginning on or after 1 April 2017 can normally be used against the company's total profits of later periods, while older losses reduce only profits of the same trade (GOV.UK: Carry forward Corporation Tax losses). The loss is shown on the return for the period in which it was made, which is one more reason a loss-making company files its CT600 on time. The loss schedule guide shows which CT600 boxes record the loss and what happens to it.

What is a CT600A, and what is section 455 tax?

A CT600A is the supplementary page where a close company reports loans to shareholders or their associates still owed at the period end. Section 455 tax of 33.75%, or 35.75% on loans made from 6 April 2026, is due unless the loan is repaid within 9 months of the period end (HMRC manual CTM61505). See the CT600A and s455 guide.

Take a director-shareholder who borrows £10,000 from the company on 1 May 2026 and still owes it 9 months after the period end: the company pays £3,575 of section 455 tax (35.75% of £10,000), because each loan is charged at the rate for the date it was made (HMRC manual CTM61505). The company can reclaim the tax once the loan is repaid, written off or released, but not any interest it paid on that tax. The relief is due 9 months and 1 day after the end of the accounting period in which the loan was repaid, and the claim must be made within 4 years (GOV.UK: Director's loans). If a director and shareholder owes more than £10,000 at any time in the year, the company must also treat the loan as a benefit in kind (GOV.UK: Director's loans). How to fill in the CT600A goes box by box.

Do I need iXBRL accounts for my CT600?

Yes, for most companies. Company Tax Returns delivered online on or after 1 April 2011 must include the accounts and the tax computation in iXBRL; for most companies, sending either on paper or as a PDF is unacceptable (GOV.UK: XBRL guide for businesses). See iXBRL accounts for a CT600.

The exceptions are narrow. Unincorporated charities, clubs and societies, and small charities, may send their accounts as PDF or iXBRL, but any computation must still be iXBRL (GOV.UK: XBRL guide for businesses). For an ordinary limited company, the practical answer is to use software that produces the tagged accounts and computation with the return. A PDF can still go with the return, but only as an extra supporting document, never as a substitute for the accounts. Before filing, check that the tagged files show the same company, period and figures as the accounts the directors approved. iXBRL accounts for a CT600 lists what to check beyond the readable pages.

What records must a company keep, and for how long?

A company must keep records of all money received and spent, its assets and debts, and its stock, for 6 years from the end of the last company financial year they relate to, and longer in some cases, such as a late return or an open compliance check (GOV.UK: Company and accounting records). See doing your own bookkeeping.

The records include receipts, invoices, bank statements and delivery notes, plus sales and purchase records showing customers and suppliers, and year-end stocktakings (GOV.UK: Company and accounting records). Keep records for longer than 6 years where they cover assets expected to last more than 6 years, such as machinery, or transactions that span more than one accounting period. The 6 years run from the end of the financial year, not from the date of each receipt. The penalty for not keeping accounting records can be a £3,000 fine from HMRC or disqualification as a company director (GOV.UK: Company and accounting records). Doing your own limited company bookkeeping sets out what to keep and how to organise it.

Can I file a CT600 without an accountant?

Yes. GOV.UK says you can either get an accountant to prepare and file the return or do it yourself (GOV.UK: Company Tax Returns). HMRC's own online filing service closed on 31 March 2026, so from 1 April 2026 companies use commercial software (GOV.UK: service closure). An adviser still helps with anything unusual. See how to file a CT600 yourself.

Can Taxley file my Company Tax Return?

Yes. Taxley (taxley.co.uk), UK online software that prepares and files the Company Tax Return (CT600) with HMRC and the annual accounts with Companies House, sends the return using the company's own Government Gateway user ID and password. It keeps the user ID encrypted and never keeps the password.

A micro-entity return costs £44.50 (promotion price until 31 Dec 2026; £89.00 from 1 Jan 2027). The fee for a return with accounts also covers filing the company's micro-entity, small, abridged or dormant accounts at Companies House once the return is paid and the accounts are finished, and Companies House itself charges no fee for annual accounts (Companies House fees). Taxley doesn't file confirmation statements, VAT returns or Self Assessment, and doesn't support R&D relief, quarterly instalment payers, or medium-sized or audited companies. It is software, not tax advice, so review the figures before you file, ideally with a qualified adviser.

Start your return with Taxley, or take the 30-second check to see whether Taxley fits your company.

Frequently asked questions

What is the penalty for filing a CT600 late?

For returns due from 1 April 2026: £200 when a day late, £200 more at 3 months, then 10% of the tax still unpaid if the return is 6 months late (18 months after the accounting period ends), rising to 20% if it is 12 months late (2 years after the period ends) (GOV.UK: late filing penalties).

Is the Companies House accounts deadline the same as the CT600 deadline?

No. A private company's annual accounts are due at Companies House 9 months after its financial year ends, or 21 months after registration for its first accounts (GOV.UK: Accounts and tax returns for private limited companies). The CT600 is due at HMRC 12 months after the accounting period ends.

Does HMRC send a Corporation Tax bill?

No. GOV.UK says you do not get a bill for Corporation Tax: the company works out its own profit and tax, pays by the deadline and reports the figures on its Company Tax Return (GOV.UK: Corporation Tax). HMRC's notice to deliver and its reminders show the payment reference.

Does HMRC pay interest on overpaid Corporation Tax?

Yes. Repayment interest on overpaid Corporation Tax is 2.75% a year from 9 January 2026, set at the Bank of England base rate minus 1% with a 0.5% minimum (GOV.UK: HMRC interest rates). See how long a Corporation Tax repayment takes.

Is the Corporation Tax year the same as the personal tax year?

No. Corporation Tax rates are set for financial years starting on 1 April, so the 2026 rates cover 1 April 2026 to 31 March 2027 (GOV.UK: Corporation Tax rates). The personal tax year starts on 6 April. Accounting period, financial year and tax year explains the three.

General information, not personalised tax or accounting advice.