Direct answer
UK Corporation Tax is charged at 19% on taxable profits up to £50,000 a year, rising gradually (Marginal Relief) to 25% above £250,000. It is calculated on the company's net profit after legally allowable expenses, entirely regardless of where you personally live as a director or shareholder. A dormant company that carries out no transactions pays nothing at all.
Who actually pays Corporation Tax?
Any company incorporated with Companies House is liable for Corporation Tax on its profits, regardless of the nationality or residence of its directors and shareholders. The company itself is an independent tax entity — a completely different question from where you personally are considered tax resident, which is covered in more depth in the tax residency and Central Management article in this guide.
Current rates and thresholds
- 19% on taxable profits up to £50,000 a year (Small Profits Rate)
- 25% on profits above £250,000 a year (Main Rate)
- A tapered rate (Marginal Relief) applies between £50,000 and £250,000
- No tax at all for a dormant company that carries out no transactions
What actually counts as taxable profit?
Taxable profit is revenue minus legally allowable business expenses: cost of goods or services, professional fees, the registered office, marketing, staff salaries, and other documented operating costs. This is fundamentally different from total revenue — a company with high revenue but large expenses may pay less tax than a smaller company with a higher profit margin.
When do you register and file?
Register with HMRC within 3 months of starting genuine trading activity (not necessarily from the incorporation date). File the Company Tax Return (CT600) within 12 months of the end of the accounting period, and pay the tax due within 9 months and 1 day of the end of that same period — meaning the payment deadline usually falls before the final filing deadline.
Late-filing penalties
- £100 immediately when the CT600 is filed late
- A further £100 after 3 months of lateness
- 10% of unpaid tax after 6 months of lateness
- After more than a year, HMRC may issue an estimated assessment higher than what's actually owed
Dormant company — an important exception
If the company hasn't started trading yet, or has paused temporarily, it can be kept dormant without paying Corporation Tax — but this doesn't exempt you from notifying HMRC of its dormant status and filing simplified dormant accounts with Companies House every year. See the annual compliance calendar article in this guide for the full dormant-company deadlines.
After paying corporation tax: what about your personal tax?
Paying UK Corporation Tax doesn't necessarily end the tax story. When you withdraw profits to yourself as a director's salary or dividends, personal income tax may apply in your country of residence — Egypt, Saudi Arabia, the UAE and others each have different rules, and some have signed double-taxation treaties with the UK that prevent the same income being taxed twice. This part needs a local accountant who understands British companies; Eteform explains the basics but does not provide binding personal tax advice.
How Eteform helps
We remind you of registration and filing deadlines, help file dormant accounts and CS01 within our packages, and the Complete package adds VAT and PAYE registration when needed. For full accounts and the actual CT600 filing, we refer you to trusted UK accountants experienced with non-resident company owners.
Next steps
Start at UK company formation, review the FAQ, compare packages, or start formation. Need help? Contact us.