In most cases, you’ll also appoint an accountant to take care of your tax affairs, and you will need to ‘authorise your agent’ to act on your behalf. You can appoint your accountant using the online service at gov.uk/appoint-tax-agent.
Your accountant can manage the registration process for you, as well as other matters such as registering your company for VAT and setting up a payroll.
Self-assess your business
Each year, your company should receive a notice from HMRC to file a company tax return. Even though your accountant will be doing the calculations, it is ultimately your responsibility to ensure it is filed correctly and on time.
Your accountant will also submit your company’s corporation tax return (CT600). Learn more about the CT600 return requirements here.
If your company hasn’t started trading yet, you still need to tell HMRC. You can notify them that your company is dormant, which avoids the need to file a full Corporation Tax return until trading begins.
How do accounting periods work?
All limited companies are self-assessed over pre-defined periods, typically 12 months in length unless your accountant has made changes to your reference dates.
Your accountant can change an accounting period to one of less than 12 months, but not longer.
Your company must pay any Corporation Tax liabilities within 9 months and one day following its ‘normal due date’, which is usually the final day of your annual accounting period.
Company tax return details
All company tax returns contain the name of your company and company registration number, the registered office address and tax reference number.
Corporation Tax rates since April 2023
Despite various u-turns by the Government during late 2022, the pre-planned rise in CT rates came into effect in April 2023. These rates remain in place for the 2025/26 tax year.
A main rate of CT of 25% now applies to annual profits of £250,000 or more.
The 19% rate still applies if your annual profits are £50,000 or less.
A system of tapered relief applies to profits which fall between the two thresholds. This results in an effective rate of 26.5% on profits between £50,000 and £250,000. You can use HMRC’s marginal relief calculator to estimate how much Corporation Tax you’ll owe.
If your company is part of a group, or has any associated companies under common control, the thresholds for the 19% and 25% rates are divided equally between them. This can affect your eligibility for the small profits rate. See HMRC’s associated companies guidance for details.
Keeping accurate records
All companies must retain their financial and tax records for at least six years – this includes all invoices, expenses, receipts, and other relevant documents.
HMRC states that you can scan these documents as a ‘legible alternative’ to keeping paper copies.
With most contractors now using online accounting systems like FreeAgent and Xero, most records can be stored safely in the cloud.
HMRC is developing a system called Making Tax Digital for Corporation Tax, which may eventually require all companies to keep and file digital records. Although not mandatory yet, most online accounting software already supports digital submissions.
Deadlines and Corporation Tax penalties
Your company must submit its annual tax return by the statutory filing date deadline, which is usually 12 months following the end of your accounting period.
If your CT return is delivered late or contains inaccuracies, you could be charged a penalty. Even if your accountant is at fault, the buck stops with the company’s directors, so make sure you understand the figures.
HMRC can charge automatic penalties starting at £100 if your return is late, even if no tax is due. See Corporation Tax penalty rules.
For example, if your company’s accounting period ends on 31st March 2026:
Your Corporation Tax must be paid by 1st January 2027
Your CT600 return must be filed by 31st March 2027
If you overpay Corporation Tax, HMRC will usually repay the excess with interest. If you pay late, interest is charged daily on the outstanding amount.
As mentioned earlier, you must also pay any tax liabilities within 9 months and one day of your accounting period end date.
Remember to get professional advice from a qualified person (your accountant) before taking any action. Don’t rely purely on the information contained in this article.
