Corporation tax is paid by businesses in the UK, and is calculated on their annual profits, in a similar way to income tax for individuals.
Unlike individuals, companies don’t receive any kind of tax-free allowance, and therefore profits are taxable.
However, there are a number of expenses and deductions that can be claimed to reduce your bill.
You must submit a company tax return to HMRC once a year.
Who pays Corporation tax?
Corporation tax is payable by all UK limited companies.
If you are a sole trader or partnership, you won’t pay corporation tax.
Instead, you’ll pay income tax on your profits via a self-assessment tax return.
It is the responsibility of the company director to ensure that the corporation tax return has been submitted on time, and the tax bill has been paid – even if the company hires an accountant to prepare their calculations.