Corporation Tax in England 2025/26: Rates, Declaration Processes and Important Considerations

What is Corporation Tax?

Corporation Tax is a tax that companies operating in the UK pay on the profits they earn. This tax is collected by HM Revenue and Customs (HMRC) and forms an important part of companies' financial obligations.

2025/26 Corporation Tax Rates

For the tax year 2025/26, Corporation Tax rates vary based on the company's profits:

• Profits of £50,000 or less: %19 (Small Profit Rate)

• Profits between £50,001 - £250,000: ranging from %19 to %25 (Marginal Relief applies)

• Profits over £250,000: %25 (Main Rate)

These rates are determined by the amount of profit the company earns, and Marginal Relief is applied in cases where profits are between £50,000 and £250,000.

Filing Process and Deadlines

Company Tax Return (CT600)

Companies must submit their Company Tax Return (CT600) to HMRC within 12 months from the end of each accounting period. This return includes the company's taxable profits and the amount of Corporation Tax payable.

Payment Deadline

Corporation Tax payments must be made within 9 months and 1 day from the end of the accounting period. For example, a company with an accounting period ending on 31 March 2025 must make its tax payment by 1 January 2026.

Late Filing and Payment Penalties

If companies fail to submit their tax return on time or delay their payments, HMRC imposes various penalties:

• 1 day late: £100 penalty

• 3 months late: Additional £100 penalty

• 6 months late: Additional penalty of 10% of unpaid tax

• 12 months late: Additional 10% penalty

These penalties are enforced if the company fails to meet its tax obligations on time and can adversely affect the company’s financial situation.

Key Points to Consider

• Accurate Accounting Records: Companies must have accurate and up-to-date accounting records when preparing the tax return.

• Marginal Relief Calculation: Marginal Relief calculations should be done carefully for profits between £50,001 and £250,000.

• Timely Filing and Payment: Returns and tax payments must be made within the specified deadlines.

• Professional Support: It may be beneficial to seek support from an accountant or tax advisor when preparing the tax return.

Manage Your Tax Processes Safely with ORTAC

It is crucial to fulfill your company's tax obligations accurately and on time in the UK for both legal compliance and your financial health. As ORTAC, we manage your tax filing processes professionally, minimize penalty risks, and strengthen your company's financial structure.

👉 To safely manage your tax processes in the UK and get expert support, contact us.