How to Register for Corporation Tax

If you have recently set up a limited company, registering for Corporation Tax is one of the first things you must do. It is a legal requirement, there is a strict deadline, and getting it wrong can lead to penalties before your company has even filed its first return. Yet the process itself is relatively straightforward once you know what to expect.

This guide covers everything you need to know: when to register, how to do it, what information you need to provide, and how Corporation Tax works once you are set up. We will also explain the current rates, accounting periods, and payment deadlines, and show you how Accounted and Penny can help you stay on top of your obligations from day one.

When You Must Register

You must register your company for Corporation Tax within three months of starting business activity. Note that this is not three months from the date of incorporation. Your company might be incorporated months before it actually starts trading or earns any income. The clock starts ticking when the company begins any form of business activity, which includes:

• Buying or selling goods or services
• Employing staff
• Advertising or marketing the business
• Receiving income of any kind
• Managing investments

If you miss the three-month deadline, HMRC can charge a penalty. The penalty regime for late registration is not always enforced aggressively for new companies that register shortly after the deadline, but there is no reason to take the risk. Register promptly.

Companies House will notify HMRC when your company is incorporated, and HMRC will typically send you a letter (known as a CT41G) asking you to register. However, do not wait for this letter. You can and should register proactively as soon as business activity begins.

Full details on the registration process are available from GOV.UK's Corporation Tax setup page.

How to Register Online

Registration is done through HMRC's online services. Here is the step-by-step process:

Step 1: Gather your information. Before you start, you will need:

• Your company's registered name and company registration number (from Companies House)
• The date business activity started (or will start)
• Your company's registered office address
• The name and address of at least one company director
• Your company's Standard Industrial Classification (SIC) code, which describes your business activity
• Details of your company's accounting period (the dates your financial year covers)
• An estimate of your company's annual turnover, if possible

Step 2: Register through HMRC's online service. You can register as part of the company formation process through the Companies House and HMRC joint service, or separately through HMRC's online portal if already incorporated.

Step 3: Receive your Unique Taxpayer Reference (UTR). HMRC will issue your company a 10-digit UTR number, usually within two to four weeks. This is essential for filing returns and making payments.

Step 4: Set up your HMRC online account. Enrol for Corporation Tax online services using your UTR to file returns, view your account, and manage your tax affairs.

Understanding Your Accounting Period

Your accounting period is the period covered by each Corporation Tax return. It is usually 12 months long and aligns with your company's financial year, but there are some important nuances.

First accounting period: Your first accounting period starts on the date business activity begins (not necessarily the date of incorporation) and typically ends on the date you choose for your annual accounts. Many companies choose 31 March or 5 April to align with the tax year, but you can choose any date.

Maximum length: A Corporation Tax accounting period cannot exceed 12 months. If your first set of accounts covers a period longer than 12 months (which is common for newly incorporated companies), HMRC will split it into two accounting periods for Corporation Tax purposes.

For example, if your company was incorporated on 1 June 2025, started trading on 15 June 2025, and has a year-end of 31 March 2027, your first set of accounts covers roughly 21 months. For Corporation Tax, this would be split into a period from 15 June 2025 to 14 June 2026 (12 months) and a second period from 15 June 2026 to 31 March 2027 (approximately 9.5 months).

Changing your accounting date: You can change your company's accounting reference date at Companies House, which will affect your Corporation Tax accounting periods. Speak to your accountant before doing this, as it can have unexpected tax consequences.

Corporation Tax Rates

Understanding the current rate structure is essential for budgeting and tax planning. Since April 2023, the Corporation Tax regime operates with two rates and a marginal relief band:

Small Profits Rate: 19%

The small profits rate of 19% applies to companies with taxable profits of £50,000 or less. This is the rate most very small limited companies will pay.

Main Rate: 25%

The main rate of 25% applies to companies with taxable profits of £250,000 or more.

Marginal Relief

Companies with profits between £50,000 and £250,000 pay an effective rate somewhere between 19% and 25%, calculated using a marginal relief formula. The marginal rate in this band is effectively 26.5%, which means that each additional pound of profit between £50,000 and £250,000 is taxed at a higher rate to transition you from 19% to 25%.

This sounds complicated, but in practice your accounting software or accountant will calculate it for you. The key point is that the rate your company pays depends on its profit level, not its size or turnover.

For the latest rates and thresholds, see the GOV.UK Corporation Tax rates page.

Associated Companies

The £50,000 and £250,000 thresholds are divided by the number of associated companies you have. If you control two associated companies, the small profits threshold drops to £25,000 each, and the upper limit drops to £125,000 each.

Associated companies broadly means companies under common control. Dormant companies are usually excluded, but the rules are detailed and you should review them carefully if you have interests in more than one company. Getting this wrong can mean paying the wrong rate of tax.

Payment Deadlines

Corporation Tax is due for payment nine months and one day after the end of your accounting period. For a company with a 31 March year end, the payment deadline is 1 January of the following year.

This is different from Self Assessment, where payment follows a 31 January/31 July pattern. There are no payments on account for Corporation Tax unless your company is classified as "large" (broadly, those with profits exceeding £1.5 million), in which case quarterly instalment payments apply.

The filing deadline for your Corporation Tax return (CT600) is 12 months after the end of the accounting period. This means you have three extra months after the payment deadline to actually file the return, but you should aim to file well before the payment deadline so you know exactly how much you owe.

Late payment attracts interest from the day after the deadline, and late filing results in automatic penalties that increase the longer you leave it:

• 1 day late: £100 penalty
• 3 months late: another £100 penalty
• 6 months late: HMRC estimates your tax and adds a 10% penalty on the unpaid amount
• 12 months late: a further 10% penalty on unpaid tax

These penalties accumulate, so a significantly late return can result in hundreds or thousands of pounds in charges on top of the tax itself.

How Corporation Tax Differs from Self Assessment

If you are moving from sole trader to limited company, the transition from Self Assessment to Corporation Tax involves several conceptual shifts.

Separate legal entity. Your company is a separate taxpayer. Its profits are taxed through Corporation Tax, not through your personal Self Assessment return. You personally pay tax on the salary and dividends you draw from the company.

No National Insurance on company profits. The company pays Corporation Tax on its profits, but it does not pay NIC on those profits (although it does pay employer NIC on salaries paid to employees, including you as a director).

Different tax year. Self Assessment follows the tax year (6 April to 5 April). Corporation Tax follows your company's accounting period, which can end on any date.

Different payment structure. Self Assessment uses payments on account in January and July. Corporation Tax is a single payment nine months and one day after the accounting period ends (for most small companies).

Company Tax Return (CT600). Instead of Self Assessment pages for self-employment, you file a CT600 with HMRC, which must be submitted online along with your company's annual accounts and tax computation.

Dividends are taxed on you personally. Dividends are paid from post-tax profits, so the company gets no relief on them. You pay dividend tax on your personal Self Assessment return at 8.75% (basic rate), 33.75% (higher rate), or 39.35% (additional rate) above the £500 dividend allowance.

What Information You Need to Keep

Once registered, your company must maintain comprehensive records for Corporation Tax purposes, including all income and expenses with supporting invoices, details of assets bought and sold, records of money taken out of or put into the company by directors, bank statements, payroll records, VAT records, and board minutes authorising dividends.

These records must be kept for at least six years from the end of the accounting period they relate to. HMRC can enquire into a Corporation Tax return for up to 12 months after filing, or longer if they suspect fraud or negligence.

How Accounted Helps Limited Companies

Managing Corporation Tax obligations alongside your day-to-day business can feel overwhelming, particularly if you are a sole director running everything yourself. This is where Accounted and Penny come in.

Penny tracks your company's income and expenses in real time via WhatsApp and bank feed integration. She categorises transactions, identifies capital expenditure for allowances claims, and maintains a running estimate of your Corporation Tax liability throughout the year. You always know roughly what you will owe, so there are no surprises at year end.

The Accounted platform for limited companies includes features specifically designed for company directors:

• Real-time Corporation Tax estimates based on current profits
• Dividend and salary planning tools to optimise your personal tax position
• Capital allowances tracking with automatic AIA identification
• Integration with your company's bank accounts for automatic transaction imports
• Deadline reminders for CT600 filing, payment dates, and annual accounts

Whether you have just registered your company or have been trading for years, having your bookkeeping and tax estimates in one place saves time, reduces errors, and helps you plan ahead.

Take a look at our pricing page to find the plan that fits your company, and let Penny handle the bookkeeping while you focus on growing your business.

Key Takeaways

Registering for Corporation Tax is a mandatory step for every limited company that starts business activity. Here are the essentials to remember:

• Register within three months of starting business activity
• You will receive a UTR number, which is essential for filing and payment
• Corporation Tax is paid nine months and one day after your accounting period ends
• The CT600 return must be filed within 12 months of the accounting period end
• The small profits rate is 19% (up to £50,000) and the main rate is 25% (£250,000 and above), with marginal relief in between
• Associated companies share the profit thresholds
• Keep records for at least six years

With Penny keeping your books in order from day one, you can be confident that your Corporation Tax affairs are under control.

Related reading: CIS and VAT: How They Work Together.

For step-by-step guidance, see our article on How to Switch from CIS Employee to Self-Employed.

Related reading: CIS Penalties for Late Returns: What to Expect.

Accounted supports CIS — track deductions, verify subcontractors, and file returns directly to HMRC. See CIS support →