What is Corporation Tax?
All limited companies and foreign companies with a branch or office in the UK are subject to UK Corporation Tax requirements. If your company is liable for Corporation Tax, it is subject to Corporation Tax requirements and deadlines. This means that you are required to take the following actions:
• Pay the required Corporation Tax on taxable profits each year (letter will be issued to the company)
• Send HMRC a completed New Company Details form as soon as possible
• File Company Tax Returns on an annual basis
Taxable profits include the money your company makes from:
• Doing Business (trading profits)
• Selling assets for more than they cost
If your company is based in the UK, it pays Corporation Tax on all its profits from the UK and abroad.
If your company isn’t based in the UK but has an office or branch here, it only pays Corporation Tax on profits from its UK activities.
Once your company has been incorporated you must ensure that it is registered for Corporation Tax within 3 months of the incorporation date. Failure to register for Corporation Tax within the first 3 months may result in you receiving a penalty.
Who is exempt from paying Corporation Tax?
If you have a UK Company that is not trading in the UK but is paying taxes overseas, your company may be exempt from paying Corporation Tax in the UK.
To apply for your company to be exempt from paying corporation tax, we will require a letter from the authorities in the country where you are paying taxes. This will need to confirm that you are paying taxes in another country.
If your company is not trading anywhere we can also register it as dormant and it will then not be liable for Corporation Tax.