How to register for corporation tax: a step-by-step guide
Corporation tax is a tax certain businesses, such as limited companies, must pay on their profits in the UK. Find out more about corporation tax and how to register for it.
Setting up your own limited company is a big step, so it’s important to remember to get the paperwork right from day one.
While it’s exciting to start your own business, don’t forget that your limited company must register for corporation tax, or you could risk paying fines to HMRC.
- Limited companies must file a tax return and pay corporation tax to HMRC on profits made in a particular accounting period. They must file a tax return even if they do not owe tax.
- After your company has been registered with Companies House, HMRC will contact you with a unique taxpayer reference (UTR).
- You use this UTR to register with HMRC for a Government Gateway account through which to file your company’s tax return and pay any tax owed.
- You must keep accurate financial records.
- Unbiased can quickly match you with a qualified accountant to help you pay your tax bill on time.
What is corporation tax?
Corporation tax is a tax your company or association pays to HMRC on the profits it makes in a particular accounting period – usually your company’s financial year.
The amount you pay depends on how much profit your business makes.
Corporation tax is liable on profits from trading, the disposal of assets and profits on investments. You may also be eligible to claim certain allowances and reliefs.
All of the following entities must register for corporation tax:
- Limited companies
- Foreign companies with a UK branch or office (also known as an ‘overseas company’)
- Clubs, co-operatives or other unincorporated associations, such as a local sports club
However, bear in mind you will not get a specific bill from HMRC for corporation tax, although you may get online reminders to pay it once your business is registered for it.
How to register for corporation tax
When you set up your new limited company, you must register with Companies House.
Doing so sets in motion your registration for Corporation Tax, as once Companies House has approved your new venture and issued a certification of incorporation, it also informs HMRC of your company’s formation.
HMRC then contacts all newly formed limited companies with a letter including your firm’s 10-digit unique taxpayer reference (UTR).
How to register for a Government Gateway account
You must use your company’s UTR to register for a Government Gateway account to connect you to HMRC’s online portal, enabling you to file your company’s accounts and pay corporation tax.
If you’ve previously registered for certain benefits or as self-employed, you will probably have had a Government Gateway account before and may know how the website works.
New companies must register for corporation tax within three months of trading or risk paying a fine to HMRC.
To register for a Government Gateway account, you will need the following items:
- Your company’s UTR
- Your company’s registration number, which you will find on the certificate of incorporation from Companies House
- Your company’s start date, which is when it first began trading
- Its financial year-end date, which is the date to which its accounts are made up, such as 31 December or 5 April.
Hold onto your UTR and keep it somewhere safe because you may need to refer to it again in the future.
What records must I keep?
Once you have set up your Government Gateway account, your company must keep detailed records of its income, profits and expenses.
These will include:
- Annual profit and loss accounts
- Bank statements
- Invoices and purchase details
- Payroll details
- Order and delivery details
- Business emails and letters
- VAT records
It is a good idea to use a qualified accountant to ensure you pay the right amount of tax on time and claim any allowances or reliefs you’re eligible for.
Your company’s tax return must be submitted to HMRC each year within 12 months of its financial year end. However, corporation tax must be paid sooner than this.
Any corporation tax due must be paid electronically nine months and a day after the accounting period end. So, for example, a company with a calendar year end of 31 December must pay its corporation tax bill by 1 October the following year.
Why must I file a corporation tax return?
It’s important to file a tax return, even if your firm doesn’t yet make a profit and doesn’t owe any tax.
If you do not file your company tax return on time, you may have to pay a penalty to HMRC.
Corporation tax is self-assessed, so you will have to work out how much you owe, or you could ask an accountant to work this out for you.
There are many online calculators that can help you do so, but here are the current rates:
| Tax year | Company profits | Corporation tax rate charged |
|---|---|---|
| 2024/25 2025/26 | £50,000 or less | 19% (small profits rate) |
| £50,001 to £250,000 | You could claim for marginal relief on profits between the two rate thresholds | |
| More than £250,000 | 25% (main rate) |
Stay on top of your company’s paperwork
Registering for corporation tax isn’t rocket science, but it is essential so that your limited company complies with the law and avoids incurring any fines from HMRC.
It’s vital to stay on top of your company’s paperwork and ensure that corporation tax returns are filed on time and any tax owed is paid by HMRC’s deadline.
Running a business can be costly, so it makes sense to avoid obvious financial pitfalls. But trading can also be time-consuming, and important matters can easily fall by the wayside.
Ensure that you and potentially an accountant keep accurate records of your company’s financial dealings and outgoings to make filing your tax returns and paying your tax bill easier.
Get expert advice
Need further advice on registering for corporation tax or any other concerns? Unbiased can quickly match you with a qualified accountant.
Enjoyed this article? Why not read our guide to setting up a limited company?
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