Corporation Tax

Corporation Tax and Limited Liability Companies

When a limited company is incorporated it is required to register with HM Revenue & Customs (HMRC), and submit a corporate tax return annually to declare what corporation tax is payable.

The information that is entered on the corporate tax return is derived from the company’s annual accounts . The tax payable is based on the profits of the company.

HOW IS CORPORATION TAX CALCULATED?

HMRC Corporation Tax Rates: With effect from 1st April 2020, the rate for corporation tax is 19% which is payable on the profits that a UK registered business makes. This rate will also apply in 2021 although it may change in future years.

The tax liability is calculated on a self-assessment basis using the financial information included in the company’s annual financial report .

121 Company Formation is an experienced accounting firm that specialises in offering a range of services to start-ups, small and medium sized companies including offering sound business advice, assisting in running their operations in the most tax efficient way, preparing their year-end accounts , and calculating and completing their annual corporation tax returns .

DOES EVERY LIMITED COMPANY PAY THE SAME RATE OF CORPORATION TAX?

All UK limited companies are obliged to pay corporation tax on their profits. This includes companies that are based overseas and has a branch that trades in the UK. In this case, the company must pay the 19% rate on any profits that relate to its UK activities.

Contact us and we would be happy to advise you about the most tax-efficient trading model for your business.

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Corporation tax

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