As your business grows, have you ever considered forming a limited company? If so, establishing one is an exciting milestone. However, it comes with legal and tax obligations.
That is why understanding how to register for Corporation Tax is an important responsibility after incorporation. Meanwhile, many company directors become confused when setting up a limited company, thinking that registering with Companies House also automatically registers the company for Corporation Tax. In fact, this is not the case. These are distinct processes, and failing to notify HMRC that your company is liable for Corporation Tax within the required time can lead to penalties.
Knowing when and how to register is essential, whether you have recently incorporated your business or are actively preparing to start trading. Moreover, it is beneficial to understand whether you need to pay Corporation Tax and what you pay Corporation Tax on, as these questions determine your ongoing tax obligations.
If you want a clear understanding of corporation tax, this guide is for you. It explains how to register for Corporation Tax and who must register, and the deadlines you need to meet.
Whether you’re just starting or already earning online, we’ll guide you with simple, honest advice tailored to your situation so you can focus on what you do best.
What Is Corporation Tax in the UK?
Before diving into the process of how to register for Corporation Tax, it is important to understand what Corporation Tax is. Corporation tax is a tax your company must pay to HMRC, calculated on the profits it generates during its accounting period. The amount you pay depends on the profit you generate, and you may be eligible for allowances and reliefs.
Do I Need to Pay Corporation Tax?
Yes. If you run a limited company, a foreign company with a UK branch, or a club/association that falls within the Corporation Tax rules and makes taxable profits, you must pay Corporation Tax. Whereas sole traders and individual partners generally pay Income Tax through Self Assessment. This includes the taxable profit generated from asset sales, investments, and trading (also known as chargeable gains).
Who Has To Pay Corporation Tax in the UK?
When searching for how to register for Corporation Tax in the UK, you first need to know who is responsible for paying it. You must pay Corporation Tax on the profit if you operate your business as:
- If you run a limited company
- Secondly, if you operate a foreign company with a UK branch or office (also referred to as an “overseas company”)
- Lastly, a club, co-operative, or other unincorporated association, such as a community group or sports club
When Must You Register for Corporation Tax?
Knowing how to register for Corporation Tax also means understanding when your registration deadline begins. Typically, you must register for Corporation Tax with HMRC within three months of starting business operations. Various business activities may include buying or selling goods, providing services, advertising the business, receiving trading income, renting business premises, or managing investments.
Keep in mind that the date your company starts trading is not always the same as the date it was incorporated with Companies House. A company can be incorporated before it starts trading or carrying on other activities that make it liable for Corporation Tax. Moreover, for Corporation Tax purposes, the registration deadline is generally based on the date on which the company start operations, rather than its incorporation date.
How to Register for Corporation Tax in the UK?
As previously stated, you must register for Corporation Tax with HMRC within three months of starting business or trading. To do this, you need a Government Gateway ID, your company registration number, your trading start date, and a 10-digit Unique Taxpayer Reference (UTR), which is sent by mail. You can use your UTR to add Corporation Tax services to your HMRC business tax account. Let’s understand how to register for corporation tax in the following steps:
Before Register
- First, register with Companies House, which automatically triggers HMRC to post your 10-digit Unique Taxpayer Reference (UTR) to your registered office address within a few weeks. Alternatively, you can often choose to set up your Corporation Tax concurrently during the initial online formation process.
- Next, gather your required information, including your Company Registration Number (CRN), SIC code, and exact trading start date, before logging online. Your company’s accounting reference date, the precise date on which your company commenced trading (such as trading, renting property, or employing staff), and your Company Registration Number (CRN). Moreover, this includes your main business activity or SIC code.
Online Register
Once your company has received a UTR, you can register for Corporation Tax online through your GOV.UK business tax account. It includes the following steps:
- First, log in to your HMRC Business Tax Account using your Government Gateway user ID and password, ensuring you have selected an ‘Organisation’ account type rather than a personal one.
- Then, choose to add a tax or service, select Corporation Tax, and enter your 10-digit UTR and company details.
- Next, HMRC mails an activation code to your registered business address.
- Log back in and enter the activation code to finalise your registration.
What Do You Pay Corporation Tax On?
The initial step is not only to learn how to register for Corporation Tax, but also to understand which profits are subject to Corporation Tax. Corporation tax is based on a company’s taxable profits, rather than the amount of money received into the business bank account. Below is a list of common taxable profits:
Trading Profits
Most companies earn income by selling products or providing services. However, the remaining trading profit is typically subject to Corporation Tax after deducting allowable business expenses.
Investment Income
Interest and other investment income received by a company may form part of its taxable profits, subject to the relevant Corporation Tax rules. The treatment of dividends depends on the type and source of the dividend.
Chargeable Gains
If your company sells assets, including commercial property, land, machinery, or certain investments for more than their allowable cost, it may incur a chargeable gain. Rather than being taxed separately, these gains are typically included in your company’s Corporation Tax calculation.
Which Business Expenses Can Reduce Your Corporation Tax Bill?
Understanding how to register for Corporation Tax is only one aspect of maintaining compliance; it is equally important to know which business expenses you can claim. Before calculating taxable profits, companies need to deduct allowable business expenses that are incurred wholly and exclusively for business purposes. The most common allowable expenses include staff salaries, office rent, utilities, professional fees, business insurance, marketing costs, software subscriptions, and business travel.
Remember that by maintaining precise records of these expenses, you can reduce your Corporation Tax liability and ensure that your Company Tax Return is supported by the right evidence.
What Are the Current Corporation Tax Rates?
When exploring how to register for corporation tax, the most important aspect to know is the current Corporation Tax rates. This table highlights the current corporation tax rates.
| Profit Level | Tax Band Type | Corporation Tax Rate |
| Profits over £50,000 | Small Profits Rate | 19% |
| Profits of £50,000 and £250,000 | Marginal Relief | Effective rate sliding from 19% to 25% |
| Profits over £250,000 | Main Rate | 25% |
When Must You File a Company Tax Return in the UK?
When exploring how to register for Corporation Tax, it is helpful to know when you have to file your company tax return in the UK. Generally, a Company Tax Return (CT600) must be submitted to HMRC 12 months after the end of your accounting period. However, any Corporation Tax owed must be paid sooner, typically nine months and one day after the end of the same accounting period.
Need Expert Support on How to Register For Corporation Tax?
Are you looking for professional support on how to register for Corporation Tax? If yes, our team of accountants are here to help you. At Influencers accountants, we help you register your company for Corporation Tax and notify HMRC when your business starts trading. Moreover, we prepare and file precise Corporation Tax Returns, calculate your Corporation Tax liability, and ensure that all filing deadlines are met.
Contact us today to get expert support with registering your company and managing your Corporation Tax obligations with confidence.
Avoid last-minute surprises by seeing your costs upfront, so you can plan better, stay in control, and make smarter financial decisions.
Bottom Line
Knowing how to register for Corporation Tax is an essential part of meeting your company’s tax obligations. If you adhere to the filing and payment deadlines, maintain accurate financial records, and register with HMRC on time, it can help your business remain compliant. As your company expands, you can simplify and make your Corporation Tax responsibilities more efficient by staying informed about changes to tax rules and seeking professional advice when necessary.
Disclaimer:
The information in “How To Register For Corporation Tax: Everything UK Businesses Need to Know” is for general guidance only and does not constitute professional tax or legal advice. Always consult a qualified accountant for your specific situation.
