Understanding Corporation Tax

Unlike Income Tax on a payslip, Corporation Tax doesn't get deducted for you automatically. It's on the company to work out, report and pay — which surprises a lot of first-time directors.

It's a Tax on Profit, Not Turnover

Corporation Tax is calculated on your company's taxable profits for the accounting period, not on everything that comes through the door. Legitimate business expenses reduce the profit figure it's calculated on.

Registration Happens Early

Most companies register for Corporation Tax shortly after they start trading — it's one of the earlier admin tasks, not something to leave until year-end.

Two Deadlines, Not One

Here's the bit that trips people up: the payment deadline and the filing deadline (for your CT600 return) aren't the same date. Payment is generally due first.