Corporation tax for small limited companies

Published 17 March 2026

Table of contents

• What is a corporation tax return?
• Who must file a corporation tax return and when is it due?
• How to file a corporation tax return online
• Which expenses reduce your corporation tax bill?
• Filing your company tax return yourself
• Xero makes corporation tax compliance simple
• FAQs on corporation tax returns

Key takeaways

• A corporation tax return consists of the CT600 form, a full set of accounts, and calculations that show how you reached the figures included in your return.
• The filing date and payment date for corporation tax are different, so make sure you’re clear on the deadlines to avoid penalties.
• For now, businesses can file their corporation tax either by using HMRC’s online filing services or with commercial accounting software. But from 1 April 2026, you’ll have to use software to do this – HMRC’s portal closes on 31 March.
• Allowable expenses and reliefs reduce your taxable profits, so make sure you’re claiming them correctly. Get help from an accountant or bookkeeper if you’re not sure.

What is a corporation tax return?

A corporation tax return is how you report and pay tax on company profits to HMRC. You need to keep financial records about your company throughout the year and use these to fill out a Company Tax return.

The main corporation tax return form, the CT600, has sections on income, turnover, chargeable gains, and deductions and reliefs. By completing a CT600 you work out your profit or loss for corporation tax, and your total tax bill. Along with this form, you need to submit a set of accounts and computations (calculations) for the figures you’re submitting in your return.

Some companies submit a corporation tax return to HMRC at the same time they file company accounts with Companies House, using HMRC’s joint filing service. But from 1 April 2026 businesses will soon need to use commercial software to submit returns and sets of accounts – more on this below.

Let’s take a closer look at corporation tax for small businesses.

Who must file a corporation tax return and when is it due?

Limited companies, foreign companies with a UK presence, and unincorporated organisations like sports clubs and community groups all need to submit corporation tax returns.

• The deadline for your corporation tax return is 12 months after the end of the accounting period it relates to. Since business owners can choose the accounting date for their company, there isn’t a single deadline for all incorporated businesses. For many companies, the accounting period is the same as their financial year (the period you draw annual accounts up for). Check your accounting period in your HMRC business tax account.
• The deadline for paying corporation tax is 9 months and one day after the end of your accounting period. This deadline comes sooner than the corporation tax return deadline, but you’ll need to have prepared your return (even if you haven’t filed it) to work out what you owe.

How to file a corporation tax return online

To submit corporation tax returns, companies can choose between using HMRC’s online filing service or commercial software.

The online filing service for corporation tax is closing on 31 March 2026. From 1 April 2026, you’ll need to use commercial software instead. Software packages already exist that support corporation tax filing, and some offer features that can help you simplify financial admin in your business.

Here’s how to file corporation tax returns. These steps apply for both online filing through HMRC and for commercial software.

1. Register for corporation tax

You need to register your company with Companies House before you can file your first corporation tax return. You can also sign up for corporation tax at the same time. You’ll need to share some information about yourself and your business, and nominate a person of significant control (PSC) for your company. This is a person who owns or controls your company, can appoint or remove directors, and influences how the organisation is run. You might also need to verify your identity.

If you’ve already registered with Companies House but need to add corporation tax services to your business tax account separately, you’ll need:

• your company registration number
• your business start date
• the date your first accounts are made up to
• your company’s Unique Taxpayer Reference (UTR)

You can then sign into your business tax account on the HMRC website. Select ‘Services you can add’ in the menu, find ‘corporation tax’ and click ‘Enrol for service’.

2. Gather your records

In your CT600 corporation tax return, you must include information about money spent and received in your company. This means you need:

• complete and accurate financial records of all income and expenditure
• specific figures for things like your total turnover, trading profits, and deductions and reliefs

GOV.UK’s guide to completing a corporation tax return sets out the records you need.

You also need to submit a set of annual accounts (also referred to as statutory accounts) that contain

• a balance sheet
• profit and loss account
• notes about the account
• a director’s report (unless your business is a micro-entity)

You also need to include the computations – calculations that show how you reached the figures in your corporation tax return.

It’s usually best to work with an accountant or bookkeeper with the skills and experience to make sure your corporation tax returns are complete, accurate, and aligned with UK tax best practices.

3. Calculate your corporation tax

Completing the CT600 form will show you your total corporation tax bill. But you can also do a rough calculation yourself.

Here’s how to calculate corporation tax:

First, you need to know your taxable profits. The formula for this is:

Taxable profits = turnover – allowable expenses

Next, you need to know your corporation tax rate. For small companies (with profits under £50,000), it’s 19%. To work out how much corporation tax you need to pay, multiply your total taxable profits by your corporation tax rate (19%).

Consider this example:

Let's say a small company has £80,000 in turnover and £30,000 in allowable expenses. Using the above formula, you'd calculate this as:

£50,000 = £80,000 - £30,000

Next, multiply the taxable profits by the corporation tax rate:

£9,500 = £50,000 x 19%

The company would pay £9,500 in corporation tax.

Here’s the list of corporation tax rates from the government.

4. Complete the CT600 form

The CT600 is the main corporation tax form. You can complete it online using HMRC’s online filing service, or you can use commercial software to complete and submit your corporation tax return. From 1 April 2026, using commercial software for corporation tax returns will become mandatory, so making the transition early gives you plenty of time to familiarise yourself with the software.

You may also need to submit supplementary pages if you receive certain types of income or wish to claim reliefs. For example, if you want to claim research and development tax credit, you need to fill in the CT600L supplementary pages. There’s a full list of supplementary pages for corporation tax at GOV.UK. Check with your accountant or bookkeeper if you’re not sure whether these apply to your business.

• HMRC provides an example CT600, so you can see what information you need to submit.
• GOV.UK also has a guide to completing a corporation tax return.

5. Submit accounts and computations

Accounts and computations must be submitted in a digital format called eXtensible Business Reporting Language (XBRL). HMRC’s online filing services automatically convert your files into XBRL, so you don’t need to manually tag anything. Just make sure your accounts and computations are complete before uploading them through the portal or compatible filing software.

6. Submit your CT600 return

Once you’ve completed your CT600 and attached any supplementary pages, you’re ready to submit the return to HMRC.

7. Paying corporation tax

You must pay your corporation tax bill no later than 9 months and 1 day after the end of your accounting period. Online banking payments typically arrive the same or the next day. Existing direct debits and BACS can take 3 working days, and new direct debits can take 5 working days. Check the methods for paying corporation tax bills to see what works best for you.

8. Keep records and confirm receipt

Keep a record of your payment reference number and save a copy of your corporation tax return. This is good financial recordkeeping practice, and it’s useful if you have a concern or query about your payment or return. Check back on your business tax account for updates on payment.

HMRC advises downloading the last 3 years of returns for your records.

9. Amend your return if needed

You can make changes or amends to your corporation tax return within 12 months of the filing deadline.

Any amends you need to make after 31 March 2026 this date need to be made using commercial software. This will mean inputting your corporation tax information again, so make sure you’ve saved a copy of your corporation tax return.

Which expenses reduce your corporation tax bill?

When you claim certain expenses and allowances, these are deducted from your profits. You’re taxed on the remaining part, so by claiming allowable business expenses and allowances, you can reduce your tax bill.

Allowable business expenses

Many common business expenses are tax deductible, including:

• office costs, like stationary or internet bills
• travel costs, like fuel and public transport tickets
• staff costs, like salaries and contractor fees
• financial costs, like insurance and bank fees
• costs of your business premises, such as rent and utility bills

Check GOV.UK’s list of allowable expenses for more information.

Capital allowances and annual investment allowance

Along with common business expenses, you can also claim capital allowances for equipment, machinery, and business vehicles. Capital allowances are a type of tax relief where costs claimed are deducted from your taxable profits.

There are different types of capital allowances that let you claim different amounts. For example, you can claim:

• up to £1 million on most plant and machinery, under the annual investment allowance (AIA)
• 100% first-year allowances for certain purchases, like electric cars and plant and machinery for gas refuelling stations, in the year they were bought

Check GOV.UK’s list of the different types of capital allowances to see which apply to your company.

Loss relief

If your company makes a trading loss, you can use this to offset the amount of tax you have to pay on gains or profits made elsewhere in your business.

You can apply these losses in the current accounting period, carry the loss back and apply it to the previous accounting period, or carry it forward for a future period.

Claim a trading loss on the CT600 form by filling in specific boxes with details of the total loss and how much you’re offsetting your taxable income by. Check out GOV.UK’s guidance on filling out the loss making section of the CT600.

Marginal relief

If your business profits rise to the point where you must pay the main rate of corporation tax (25%, instead of the small-company rate of 19%) you might be able to claim marginal relief.

For example, if your business’s taxable profits rise above £50,000 but remain below £250,000, you can claim marginal relief, which gives you a gradual corporation tax rate increase instead of a sudden, large tax bill.

Use this marginal relief calculator to work out how much corporation tax you’re likely to pay with the relief applied.

R&D and other reliefs

You might also be able to claim research and development relief, which applies to innovative projects in science and technology. For relevant projects, you can claim costs such as research carried out at universities and the maintenance of R&D equipment.

Other reliefs the government allows include:

• creative industries relief for those making profits from theatre, film, television, animation, and gaming
• disincorporation relief if you’re closing the company and becoming a sole trader, ordinary business partnership, or limited partnership
• reliefs for terminal, capital, and property income losses

Filing your company tax return yourself

Company tax returns are more complex than Self Assessment Income Tax returns.

You might be able to do your corporation tax returns yourself if you’re confident handling business finances and have access to all the records and reports you need. It also helps if you’re using modern accounting software that makes it easy to prepare profit and loss reports and balance sheets, especially if your records can flow directly into draft returns automatically.

Otherwise, it’s probably best to use an accountant. They know which reliefs and allowances you can claim, and will prepare your accounts and CT600 accurately so you avoid penalties.

And when you use modern accounting software, your accountant or bookkeeper can work directly from the records already in your system to prepare your corporation tax return and submit it to HMRC. Since using compliant commercial software becomes mandatory from 1 April 2026, switching now will give you plenty of time to get familiar with the process before the deadline.

Xero makes corporation tax compliance simple

Xero helps you keep compliant corporation tax records year round, and simplifies regular admin tasks.

Xero’s digital recordkeeping features mean your financial information is stored securely, ready for your advisor to use in draft returns. They can prepare and submit returns directly to HMRC on your behalf directly from Xero, so you don’t need to switch between pieces of software.

Xero also lets you submit invoices online, capture expenses, and track your cash flow for a full financial picture of your business. Generating reports and statements for your accounts is simple, and with Xero’s forecasting features, you can plan for the future too.

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FAQs on corporation tax returns

Here’s extra information on corporation tax for small businesses:

Do I need to file if my company made a loss?

Yes. If you make a loss or have no corporation tax to pay, you still need to submit a return.

Can I file one return if my first accounts cover more than 12 months?

The corporation tax return covers a 12-month period. If your period is longer than 12 months, which is sometimes the case in your company’s first year, you need to submit two returns to cover the 12 months and any additional period. This also means you’ll have two payment deadlines.

HMRC offers specific guidance for companies in their first year should you need to submit two returns and make separate payments.

How long do I need to keep corporation tax records?

You must keep corporation tax records for 6 years following the end of the company financial year they relate to.

Can I pay corporation tax before filing?

Yes – although you need to prepare your corporation tax return to know exactly how much tax you owe. The corporation tax payment deadline is 9 months and 1 day after the end of your accounting period. The filing deadline is 12 months after the end of your accounting period. So, you can prepare your corporation tax return to work out what you owe, submit payment, then file the return with HMRC afterwards.

Can HMRC withdraw a notice if my company is dormant?

If HMRC sends a notice that you need to submit a company tax return, even if your company is dormant, you must file this. If your company has stopped trading and has no other income, you can tell HMRC it’s dormant for corporation tax going forward.