Do limited companies need to pay corporation tax?


Guys, I’ve got a question about corporation tax. Now, I’ve just had my application approved by Companies House for a private limited by shares company. The next order of business will obviously be to register my new company with HMRC. I’m not sure about taxes, though. As a sole trader, I simply paid income tax. As far as personnel goes, my company isn’t going to be any bigger. So, I don’t feel like I really qualify as a corporation. Bearing that in mind, does my limited company need to pay corporation tax? Would appreciate any insight you might be able to provide.



A business becomes a corporation from the moment it is incorporated as an individual legal entity at Companies House. All limited companies, therefore, must be registered for Corporation Tax within 3 months of starting to trade, irrespective of home many people are involved in the business.

You will be required to pay 20% Corporation Tax on all taxable income generated through your company, after you have accounted for your director’s salary, business overheads and expenses. This tax is payable to HMRC once per year at the end of each accounting period. You will also have to file a Company Tax Return each year.

2 years ago

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