When a company trades as a limited company, the company will pay corporation tax based on the level of profits it makes.  

Corporation tax is the tax that UK companies pay on their taxable profits not the profit reported on the financial statements. Taxable profit is the profit after claiming deductable expenses and other deductions that are allowed to be claimed.

It is the responsibility of the company director to ensure that the corporation both the tax return was submitted, and the tax bill was paid on time, even if the company hires an accountant to prepare their calculations.

1. Corporation Tax Rate
   
   The corporation tax rate has been 19% for all limited companies since April 2016. Prior to this, the rate varied depending on the company's profits.
   
   The corporation tax main rate will increase from 19% to 25% applying to companies making taxable profit more than £250,000 from 1 April 2023.
   
   A small profits rate (SPR) will also be introduced for companies with profits of £50,000 or less so that they will continue to pay Corporation Tax at 19%.
   
   Companies with profits between £50,000 and £250,000 will pay tax at the main rate reduced by a marginal relief providing a gradual increase in the effective Corporation Tax rate.  HMRC has set Marginal Relief fraction to provide a gradual tax rate increase.
    
   Corporation tax rates table:
   

   Financial Year	2020/21	2021/22	2022/23	2023/24
   Main Rate	19%	19%	19%	25%
   Small Profits Rate	N/A	N/A	N/A	19%
   Lower Threshold	N/A	N/A	N/A	£50,000
   Upper Threshold	N/A	N/A	N/A	£250,000

   
   
2. Corporation Tax Return Submission Deadline
   
   Corporation Tax Return Submission Deadline
   
   Every year a company must file a corporation tax return with HMRC along with a detailed set of company accounts. The deadline for filing a company’s tax return with HMRC is 12 months after the financial year end or three months after  receiving a notice to deliver a return from HMRC, whichever is latest.
   
   Even if no corporation tax needs to pay, a company still need to submit a company tax return until the company write to HMRC that the company has ceased trading or is 'dormant' for corporation tax purposes.  If HMRC agrees, a letter will be sent to the company confirming no corporation tax needs to pay or no company tax returns needs to be submitted.
   
   
3. Corporation Tax Payment Deadline
   
   A company may be required to pay the corporation tax bill before the tax return is due.
   
   If a company has made a taxable profit of anything up to £1.5m, the corporation tax must be paid within nine months and one day after the end of its financial accounting year.  For example, if a company’s accounting year ends is on 31 March, the corporation tax payment will be due on 1 January the following year, while the corporation tax return is due three months later.
   
   For large companies with a taxable profits of more than £1.5m, corporation tax must be paid in instalments. For a 12-month accounting period, the total tax liability will be paid in 4 instalments, each instalment is a quarter of  company’s total tax liability.
   
   If a company makes a taxable loss but had made a profit in the previous year, it may be able to carry back that loss to the previous year and get some tax refunded.
   
   
4. Corporation Tax Late Penalties
   
   HMRC has the power to raise penalties in below three circumstances:
   
   

   (1)	Late tax returns HMRC has set out the following penalties for those who are late filing a company tax return: One day          : £100 fine Three months  : Another £100 fine Six months     : HMRC will estimate a company’s bill and add a 10% penalty onto  what they thinks the unpaid tax will b Twelve months: another 10% is added to the estimated tax bill If filing of tax return is late three times in a row, HMRC will increase the £100 penalties to £500 each.
   (2)	Late corporation tax payments If the tax wasn’t paid on time, interest will be charged on the amount owing and may also have to pay a penalty or surcharge. If a company can't afford to pay, HMRC suggests contacting them as soon as possible, and may be able to set up a payment plan. HMRC has the power to carry out enforcement actions to recover any money owed.
   (3)	Inaccurate information If a company tax return is filed and it's found to be inaccurate, HMRC may fine the company. How much a company is penalised depends on whether HMRC believes the mistake was deliberate, or the company tried to hide it, and whether the company voluntarily admit to it before HMRC finds out.