Corporation Tax is the tax a limited company pays on its profit. The company pays it, not you personally — money you take out of the company as salary or dividends is taxed separately, on your own tax return.
How the profit is worked out
Start with your income, take off your allowable business costs, and what is left is your profit. HMRC then applies some adjustments — for example, entertaining clients is a real cost to you but is not deductible for tax. The result is your taxable profit.
What rate you pay
Since April 2023 there have been two rates. Companies with profits up to £50,000 pay the small profits rate of 19%. Companies with profits above £250,000 pay the main rate of 25%. In between, you pay the main rate reduced by marginal relief, which produces an effective rate that climbs gradually from 19% to 25%.
When it is due
Corporation Tax is due nine months and one day after the end of your accounting period. The return itself is due twelve months after the period ends — so the payment deadline arrives three months before the filing deadline, which catches a lot of people out.
What Telore does about it
Telore keeps a running estimate as the year goes on, so you can put money aside gradually instead of finding out in one go. The estimate is based on the transactions you have recorded, and the final figure will depend on your completed accounts.
This is guidance, not advice. Telore is software, not an accountancy practice. Tax figures in Telore are estimates based on what you have recorded, and anything filed goes through the official HMRC and Companies House services, subject to their acceptance. For a decision that turns on your own circumstances, speak to an accountant.
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