What is Corporation Tax and Do I Need to Register
Corporation Tax is a tax on the profits a limited company makes, whether that be from investments, selling assets, providing services, or simply trading. You are legally required to register for Corporation Tax (CT) and pay it on any profits you make if you are a limited company in the UK.
A pretty common misunderstanding people have is that registering your company with Companies House automatically registers you for Corporation Tax, this is not the case. Companies House (CH) notifies HMRC when a new company is incorporated, but that message doesn’t register you for any taxes. HMRC creates a record for your company and posts your Unique Taxpayer Reference (UTR) to your registered address, however you still need to actively register for CT yourself. Failure to do so can result in a hefty penalty, something we will cover in greater detail.
So When Do I Need to Register for Corporation Tax?
You are required to tell HMRC that your company is active within 3 months of trading, advertising, renting premises, employing staff, or earning any taxable income. Regardless of how small the income is, even a single penny, once any of these activities begin, the countdown starts.
The penalty for registering late can be up to £1000, plus 10% of any unpaid tax once your CT bill is due. Therefore, it would be advisable to register on time to avoid any unnecessary fines and ensure HMRC confirm the correct deadlines early doors.
What Do I Need to Know Before I Register ?
Have the following information ready before you start:
• Your company registration number, which can be found on your certificate of incorporation from Companies House.
• The date your company started trading, this is the date it first became active, not the date of incorporation.
• Your company’s registered office address.
• The nature of your business activities.
• The date you plan to prepare your annual accounts to; this is your accounting reference date.
You also need your Government Gateway user ID and password. If you don’t have one you can create one on the HMRC website.
How to Register for Corporation Tax Step by Step
1. Sign into your Government Gateway account, if you have not already created an account you can do so on HMRC's website
2. Add Corporation Tax as a tax to your business tax account. If you have already received your UTR in the post, have it ready as you will need it during the process.
3. Once you have signed in, HMRC will ask you to confirm you company details including the date trading commenced, your accounting reference date, and the nature of your business. It’s a relatively quick form once you have all the details at hand, the longest part of the process tends to be waiting for the UTR to arrive in the post before you can complete it.
4. Typically, HMRC takes up to 10 working days to send your activation code, or up to 21 days if you’re based internationally.
5. Once you receive your activation code you will need to log back into your government gateway account to enter it.
6. Once you activate your service, your CT account is live and you’ll be able to see your company’s accounting details and filing deadlines.
Your UTR and Why It Matters
Your UTR is a mandatory 10-digit number issued by HMRC to all new limited companies. It’s your company’s identification number for everything tax related and you will need it to register for and pay CT, in addition to file your returns. Don’t use your personal UTR as this is a separate number.
Make sure to keep your UTR safe and make a note of it somewhere secure, you’ll need it each time you deal with HMRC.
Key Deadlines You Should Be Aware Of
Once registered, there are 3 important deadlines to remember:
• Register for CT within 3 months of trade commencing.
• Pay any CT owed within 9 months and 1 days of the end of your accounting period.
• File your CT600 Corporation Tax return within 12 months of the end of your accounting period.
For example, if your accounting period ends on 31 March 2026, your CT will be due by 1 January 2027 and your CT600 must be filed by 31 March 2027.
What About Dormant Companies?
If your company hasn’t started trading yet but has been incorporated, it is classed as dormant. Dormant companies tell HMRC separately and don’t file a CT600 until trading commences. You still should inform HMRC that the company is dormant to keep your tax status accurate and avoid any unnecessary correspondence.
To Summarise
Registering for CT is a straightforward process but its one that catches a lot of new limited company directors out, especially the 3-month deadline and the fact it’s a separate process from incorporating your company. Getting it done promptly means you have a clear picture of your deadlines from the start and avoid penalties.
