Starting a company is exciting, until the admin arrives.

One of the first things that usually pops up is Corporation Tax.

It sounds complicated, but it doesn’t have to be.

Here’s what it actually means, what you’ll need to do, and how to stay on top of it without losing sleep.

What Corporation Tax actually is

Corporation Tax is the tax your company pays on its profits.

It covers anything you earn from trading, investments, or selling assets.

It’s a bit like Income Tax for businesses, except it’s paid by the company itself, not you personally.

You’ll deal with HMRC, not Companies House, when it comes to paying it.

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Who it applies to

If you’ve registered as a limited company, Corporation Tax is part of your world.

It also applies to:

• Foreign companies with a UK office or branch
  
  
• Certain clubs and co-operatives

If you’re a sole trader or in a partnership, you don’t pay Corporation Tax. You’ll handle tax through Self-Assessment instead.

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When it kicks in

Corporation Tax becomes relevant as soon as your company starts trading, even if you haven’t made any money yet.

“Trading” just means you’re doing business: sending invoices, buying supplies, or selling services.

Once you’ve started trading, you’ll need to let HMRC know within three months.

They’ll set up your company’s Corporation Tax record and send your deadlines.

💡 Foundrs will give you a nudge when it’s time to do this and link you straight to HMRC, so you don’t miss it.

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Current Corporation Tax rates

For the 2025/26 tax year, rates look like this:

Example:

If your company made £80,000 in profit, you’d pay 19% on part of that and a slightly higher rate on the rest.

You can use HMRC’s calculator to get a rough idea, or if numbers make your head spin, we can help you find an accountant or software who can support with this.

Registering for Corporation Tax

Once your business starts trading, you’ll need to register for Corporation Tax through HMRC’s website.

You’ll need:

• Your company name and registration number (from Companies House)
  
  
• The date you started trading
  
  
• Your business address and SIC code
  
  
• Director details
  
  

💡 Foundrs tip: After incorporation, your dashboard will show reminders and a direct link to the official registration page, so you know exactly when and where to do it.

What counts as profit

Corporation Tax is based on taxable profit, that’s your income after business costs have been taken off.

Here’s what it includes:

• Money from sales or services
  
  
• Interest or investments
  
  
• Profits from selling assets (like equipment)
  
  

You can usually deduct:

• Staff costs
  
  
• Office rent or utilities
  
  
• Software and tools
  
  
• Travel and professional fees
  
  

Just a note: this guide is here to help you understand the basics, not to give personal tax advice. For anything specific, it’s best to speak with an accountant.

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Filing and paying your Corporation Tax

Every limited company must file a Corporation Tax return (CT600) each year (even if you didn’t make a profit).

You’ll need to submit:

• Your CT600 form
  
  
• Company accounts (profit & loss, balance sheet)
  
  
• A computation showing how you calculated your profit

Most companies do this through accounting software or an accountant.

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Deadlines to know

• Pay your tax: 9 months and 1 day after your accounting period ends
  
  
• File your return: within 12 months of that same date

Example:

If your financial year ends on 31 March 2025, you’ll need to pay by 1 January 2026 and file by 31 March 2026.

💡 Foundrs helps you keep track of key dates with dashboard reminders, so nothing slips through the cracks.

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New companies and your first year

When your company is formed, you’ll get:

• A Company Number from Companies House
  
  
• A Unique Taxpayer Reference (UTR) from HMRC (usually within 10 days)

HMRC will then confirm your accounting period and first deadlines.

Sometimes your first period is slightly longer than 12 months, so you might file two returns the first year.

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Keeping good records

HMRC expects businesses to keep financial records for at least six years.

That includes:

• Invoices and receipts
  
  
• Bank statements
  
  
• Payroll and expenses
  
  
• Equipment purchases and sales

Keeping things tidy from the start makes year-end admin so much easier.

💡 Foundrs helps you store and manage your company documents all in one place, so you always know where everything is.

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Dividends and Corporation Tax

Once your company has paid its Corporation Tax, you can share profits with shareholders as dividends.

They’ll pay personal tax on what they receive, depending on their income level.

Make sure every dividend is properly recorded, your accountant can guide you on this.

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How to stay on top of it all

A few habits make a big difference:

• Keep business and personal finances separate
  
  
• Track income and expenses regularly
  
  
• Use your Foundrs dashboard for reminders and documents
  
  
• Set aside roughly a quarter of your profits for tax
  
  
• Get professional help when you need it, we can help you find a trusted accountant if you don’t already have one

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In short

Corporation Tax is just one of those things every limited company has to deal with, but it doesn’t have to be stressful.

As long as you know what’s expected, keep things organised, and get reminders along the way, you’ll stay compliant and in control.

Foundrs can’t file your tax return for you, but we’ll make sure you know when to do it, what to do next, and who can help.

That’s how we make the admin side of business feel simpler, so you can focus on actually running it.

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