Running a business comes with plenty of responsibilities — and one of the most important is understanding your Corporation Tax. Whether you’re a new company director or an established business owner, getting to grips with how it works can save you time, stress, and money.
At Leigh Tax, we help businesses across Leigh and Greater Manchester stay compliant and efficient when it comes to taxes. Here’s what every business owner should know.
💡 What Is Corporation Tax?
Corporation Tax is a tax on the profits made by limited companies and certain other organisations, such as clubs or associations.
You’ll need to pay it on profits from:
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Trading (doing business)
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Investments
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Selling assets for more than they cost (known as chargeable gains)
If your company is registered in the UK, you’ll usually have to pay Corporation Tax on all your profits, both in the UK and abroad.
🕒 When Do You Pay Corporation Tax?
Corporation Tax isn’t automatically calculated for you — it’s up to your business to report profits and pay on time.
You must:
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Register for Corporation Tax when you start your business or begin trading.
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File a Company Tax Return (CT600) every year.
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Pay Corporation Tax within 9 months and 1 day after the end of your accounting period.
Missing deadlines can result in penalties and interest, so it’s important to stay organised.
📊 How Is It Calculated?
The amount you pay depends on your taxable profits.
As of April 2023:
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The main Corporation Tax rate is 25% for profits over £250,000.
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Smaller companies with profits below £50,000 pay 19% (the small profits rate).
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Companies in between may pay a marginal rate, a gradual increase between 19% and 25%.
Your accountant will help you determine which rate applies and ensure all allowances and deductions are claimed correctly.
⚙️ What Can You Deduct from Your Taxable Profits?
To reduce your Corporation Tax bill, you can deduct certain allowable business expenses, such as:
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Staff wages and pension contributions
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Rent, utilities, and office costs
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Professional fees (like accountants and solicitors)
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Marketing and advertising expenses
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Equipment and machinery under capital allowances
Claiming the right deductions can significantly lower your tax liability — that’s where professional advice really pays off.
🧠 Common Mistakes to Avoid
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Forgetting to register for Corporation Tax on time
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Missing payment or filing deadlines
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Claiming personal expenses as business costs
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Not keeping proper financial records
Working with a qualified accountant ensures these issues are handled properly from the start.
🤝 How Leigh Tax Can Help
At Leigh Tax, we take the complexity out of Corporation Tax. From registering your company to filing accurate returns, we make sure your business stays fully compliant — while maximising your tax efficiency.
Our friendly, ACCA-certified team has been helping businesses in Leigh since 1993, and we’re here to guide you through every step.