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Corporation Tax Filing (CT600)
A comprehensive guide to UK Corporation Tax for limited companies. Learn how to calculate taxable profits, apply capital allowances, claim reliefs, complete the CT600 return, and submit iXBRL tagged accounts to HMRC. Updated for FY 2025/26 with FY 2026/27 changes.
10
Modules
4-5 hrs
Duration
FY 2025/26
Current Year
Free
Access
Course Modules
Click on each module to expand the content. Updated Jan 2026
1Introduction to Corporation Tax
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What is Corporation Tax?
Corporation Tax (CT) is a tax on the profits of UK limited companies, foreign companies with UK branches, and certain unincorporated associations. Unlike Income Tax which uses a tax year (6 April to 5 April), Corporation Tax follows the Financial Year (FY) running from 1 April to 31 March.
Who Pays Corporation Tax?
- UK Limited Companies – All companies incorporated in the UK (Ltd and PLC)
- Foreign Companies – Companies with UK permanent establishment
- Unincorporated Associations – Clubs, societies, co-operatives carrying on business
- Community Interest Companies (CICs) – Social enterprises
Corporation Tax Rates (FY 2025/26 & FY 2026/27)
The rates below apply from 1 April 2025 and are confirmed unchanged for FY 2026/27:
| Profit Level | Rate | Notes |
|---|---|---|
| Up to £50,000 | 19% (Small Profits Rate) | Lower limit |
| £50,001 - £250,000 | 19% - 25% (Marginal Relief) | Sliding scale |
| Over £250,000 | 25% (Main Rate) | Upper limit |
Associated Companies: The £50,000 and £250,000 thresholds are divided by the number of associated companies plus one. E.g., one associated company = £25,000 small profits threshold.
Marginal Relief Calculation
Example: Company profits £100,000
• CT at 25% = £25,000
• Marginal Relief = (£250,000 - £100,000) × 3/200 = £2,250
• CT payable = £22,750 (effective rate 22.75%)
• CT at 25% = £25,000
• Marginal Relief = (£250,000 - £100,000) × 3/200 = £2,250
• CT payable = £22,750 (effective rate 22.75%)
What is Taxed?
- Trading profits – Profits from business operations
- Investment income – Interest, rental income, royalties
- Chargeable gains – Profits from selling capital assets
Patent Box: Profits from patent exploitation can qualify for a 10% effective rate.
2Registration and Key Deadlines
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Registering for Corporation Tax
New companies must register within 3 months of starting to trade. Registration is done online through HMRC. You need: Company Registration Number, date active, registered office, SIC code, and accounting period end date.
Key Filing Deadlines
3 monthsRegister for CT after starting to trade
9 monthsFile accounts with Companies House
9 months + 1 dayPay Corporation Tax
12 monthsFile CT600 with HMRC
Example: Year End 31 March 2026
• Companies House: 31 December 2026
• CT payment: 1 January 2027
• CT600 deadline: 31 March 2027
• Companies House: 31 December 2026
• CT payment: 1 January 2027
• CT600 deadline: 31 March 2027
Late Filing Penalties
⚠️ From 1 April 2026: Late filing penalties will approximately double.
| How Late | Current | From Apr 2026 |
|---|---|---|
| 1 day late | £100 | £200 |
| 3 months late | £200 total | £400 total |
| 6 months late | + 10% of tax | + 10% of tax |
| 12 months late | + 20% of tax | + 20% of tax |
Quarterly Instalment Payments (QIPs)
"Large" companies (profits over £1.5 million) pay quarterly:
- 1st: 6 months + 13 days into period
- 2nd: 9 months + 13 days into period
- 3rd: 13 days after period end
- 4th: 3 months + 13 days after period end
3Calculating Taxable Profits
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Tax Computation Structure
Accounting profit before tax
Add back: Disallowable expenses, Depreciation
Deduct: Capital allowances, Non-taxable income
= Adjusted trading profit
Add: Investment income, Chargeable gains
Deduct: Charitable donations, Losses b/f
= Taxable Total Profits (TTP)
Add back: Disallowable expenses, Depreciation
Deduct: Capital allowances, Non-taxable income
= Adjusted trading profit
Add: Investment income, Chargeable gains
Deduct: Charitable donations, Losses b/f
= Taxable Total Profits (TTP)
Common Add-Backs
ADDDepreciation – All depreciation/amortisation
ADDEntertainment – Client entertainment
ADDFines/penalties – Parking fines, tax penalties
ADDPolitical donations
ADDLegal costs for capital items
Common Deductions
DEDUCTCapital allowances
DEDUCTProfit on fixed asset sales (dealt with under gains)
DEDUCTUK dividends received (not taxable)
Worked Example
TechStart Ltd - Year ended 31 March 2026
| Profit before tax | £150,000 |
| Add: Depreciation | £25,000 |
| Add: Entertainment | £3,000 |
| Less: Capital allowances | (£35,000) |
| Less: UK dividends | (£5,000) |
| Taxable Total Profits | £138,000 |
4Capital Allowances2026 Changes
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⚠️ Major Changes from 2026:
• New 40% First Year Allowance from January 2026
• Writing Down Allowance reducing from 18% to 14% from April 2026
• 100% FYA for zero-emission cars extended to 31 March 2027
• New 40% First Year Allowance from January 2026
• Writing Down Allowance reducing from 18% to 14% from April 2026
• 100% FYA for zero-emission cars extended to 31 March 2027
Capital Allowances Summary (FY 2025/26 & 2026/27)
| Allowance | Rate | Applies To |
|---|---|---|
| Full Expensing | 100% | New main rate plant/machinery (companies only) |
| AIA | 100% | Most P&M up to £1,000,000 |
| 100% FYA - Electric | 100% | Zero-emission cars, EV charge points (to Mar 2027) |
| NEW: 40% FYA | 40% | Main pool assets from Jan 2026 (incl. leased) |
| 50% FYA | 50% | New special rate assets |
| Main Rate WDA | 18% → 14% | From April 2026 |
| Special Rate WDA | 6% | Integral features, high-emission cars |
New 40% First Year Allowance (from January 2026)
- Applies to main pool qualifying expenditure
- NEW: Assets used for leasing now eligible
- Available to both companies and unincorporated businesses
- Provides better relief than 14% WDA from April 2026
Cars - Special Rules
| CO2 Emissions | Allowance | Note |
|---|---|---|
| 0g/km (Electric) | 100% FYA | Extended to 31 March 2027 |
| 1-50g/km | 18% → 14% | Rate change from April 2026 |
| Over 50g/km | 6% Special Rate | Unchanged |
Example Calculation
Innovation Ltd - Year ended 31 December 2026
• Computer equipment £15,000 (new) → Full expensing: £15,000
• Office furniture £8,000 (second-hand) → AIA: £8,000
• Electric car £45,000 → 100% FYA: £45,000
• Petrol car £25,000 → 6% WDA: £1,500
Total allowances: £69,500
• Computer equipment £15,000 (new) → Full expensing: £15,000
• Office furniture £8,000 (second-hand) → AIA: £8,000
• Electric car £45,000 → 100% FYA: £45,000
• Petrol car £25,000 → 6% WDA: £1,500
Total allowances: £69,500
5Trading Losses
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Loss Relief Options
| Option | Description | Time Limit |
|---|---|---|
| Current Year | Set against total profits same period | 2 years |
| Carry Back | Set against previous 12 months | 2 years |
| Carry Forward | Set against future total profits | No limit |
| Group Relief | Surrender to group companies | Same period |
Carry Forward Rules (post-April 2017)
- Can set against total profits
- Subject to restriction: £5m allowance + 50% of remaining profits
- No time limit
Wasted Reliefs: Setting losses against total profits may waste charitable donations deduction or reduce profits below marginal relief threshold.
Terminal Loss Relief
When ceasing trade, carry back final 12 months' losses against preceding 3 years (LIFO basis).
6R&D Tax Relief2026 Update
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Merged R&D Scheme (ERIS) - From April 2024
| Feature | Rate |
|---|---|
| Enhanced deduction | 86% additional (186% total) |
| Above-the-line credit | 20% (taxable) |
| Effective benefit (25% CT) | 21.5% net |
Spring 2026: Advance Assurance Pilot
SMEs can gain clarity on R&D claims before submitting to HMRC.
SMEs can gain clarity on R&D claims before submitting to HMRC.
R&D Intensive SMEs: Loss-making SMEs with R&D ≥30% of total expenditure can claim enhanced rates: 86% deduction + 14.5% payable credit.
Qualifying Expenditure
- Staff costs – Salaries, NIC, pensions
- Consumables – Materials consumed in R&D
- Software – Used directly in R&D
- Subcontracted R&D – 65% of cost
- Externally provided workers – 65% of cost
Pre-notification Required: First-time claimants must notify HMRC within 6 months of period end.
7Chargeable Gains for Companies
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Key Differences from Individual CGT
| Aspect | Companies | Individuals |
|---|---|---|
| Tax Rate | CT rate (19-25%) | CGT (18-24%) |
| Annual Exemption | None | £3,000 |
| Indexation Allowance | Yes (frozen Dec 2017) | No |
Gain Calculation
Sale proceeds
Less: Disposal costs
Less: Original cost
Less: Enhancement expenditure
= Unindexed gain
Less: Indexation allowance (to Dec 2017)
= Chargeable gain
Less: Disposal costs
Less: Original cost
Less: Enhancement expenditure
= Unindexed gain
Less: Indexation allowance (to Dec 2017)
= Chargeable gain
Key Reliefs
- Rollover Relief – Defer gain when reinvesting in qualifying assets (1 year before to 3 years after)
- Substantial Shareholding Exemption – Tax-free disposal of 10%+ shareholdings held 12+ months
8The CT600 Form Explained
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Main Sections
| Boxes | Section |
|---|---|
| 1-30 | Company Information |
| 35-80 | Turnover & Income |
| 85-120 | Chargeable Gains |
| 125-170 | Deductions & Reliefs |
| 175-235 | Tax Calculation |
| 240-295 | Tax Reliefs (R&D, etc.) |
Key Boxes
Box 145Trading profits
Box 155Property income
Box 190Chargeable gains
Box 235Taxable Total Profits
Box 430Tax payable
Supplementary Pages
- CT600A – Loans to participators
- CT600B – Controlled foreign companies
- CT600C – Group/consortium relief
- CT600E – Charities
9iXBRL Accounts and Filing
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What is iXBRL?
iXBRL (Inline eXtensible Business Reporting Language) tags financial data for electronic submission. All CT600s must be filed online in iXBRL format.
Software Options
| Option | Examples |
|---|---|
| Commercial Software | Xero, QuickBooks, Sage, CCH |
| HMRC Joint Filing | Small/dormant companies |
| Converters | DataTracks, CoreFiling |
Filing Process
1. Prepare accounts (UK GAAP/IFRS)
2. Calculate tax computation
3. Convert to iXBRL
4. Validate file
5. Submit online
6. Save acknowledgement
2. Calculate tax computation
3. Convert to iXBRL
4. Validate file
5. Submit online
6. Save acknowledgement
Validate First: Always validate iXBRL files before submission. HMRC rejects files with errors.
10Checklist & Common Mistakes
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Pre-Filing Checklist
- Accounts approved by directors
- Accounting period matches HMRC records
- Add-backs identified (depreciation, entertainment)
- Capital allowances computed (AIA/FE/40% FYA)
- Losses reviewed
- Associated companies counted
- R&D AIF submitted if claiming
- iXBRL validated
Common Mistakes
| Mistake | How to Avoid |
|---|---|
| Missing deadline | Calendar reminders, file early |
| Forgot depreciation add-back | Use adjustment checklist |
| Claimed entertainment | Review expenses carefully |
| Missed AIA claim | Review all capital purchases |
| Wrong associated company count | Document group structure |
| R&D pre-notification missed | Notify within 6 months |
Record Keeping
Keep all records for at least 6 years from accounting period end: accounts, receipts, bank statements, contracts, payroll, capital asset register.
Professional Help: For complex situations (R&D, groups, M&A), professional advice is recommended.
Course Resources
Download Course Materials
Get the complete Corporation Tax Filing guide and reference notes.
Video Tutorial
Watch our detailed walkthrough.
Need Professional Help?
Our team handles CT600 filing from accounts preparation to HMRC submission.
- ✓ CT600 preparation & filing
- ✓ Tax computation & planning
- ✓ Capital allowances review
- ✓ R&D tax credit claims
- ✓ iXBRL conversion
Recommended Software
- • Xero – Cloud accounting
- • QuickBooks – SME accounts
- • Sage – Full-service
- • FreeAgent – Small companies
Quick Reference FY 2025/26
Small Profits Rate
19% (≤£50k)
Main Rate
25% (>£250k)
AIA Limit
£1,000,000
Main WDA
18% → 14% (Apr 2026)
⚠️ 2026 Changes
- • Jan 2026: New 40% FYA
- • Apr 2026: WDA 18%→14%
- • Apr 2026: Penalties double
- • Mar 2027: EV FYA extended