Corporation tax, often known as corporation tax, is a tax paid by companies on their annual earnings.
If your firm earns between £50,000 and £250,000, you will pay tax at a rate of 26.5%. If you earn less than £50,000, the rate is 19%. If you earn more than £250,000, the rate is 25%.
Unlike sole traders, you do not get a tax-free Personal Allowance to offset company tax.
Who is responsible for paying corporation taxes?
This tax is levied on more than only limited liability businesses. Actually, you have to pay if you are one of the following organisations and generate a profit:
- Any foreign companies have a UK branch or office
- A club.
- A cooperative
- A communal group.
- A sporting club.
- Housing Associations
How do I pay company tax?
Before you pay company tax, you must first register your firm with Companies House and then register to pay with HMRC. Unless you registered your firm by mail, via third-party software, or through an agent, this is a one-time operation. If you accomplished any of these three activities, you should register to pay corporation tax separately from your registration with Companies House.
Make sure you pay your bill nine months and one day after the conclusion of the accounting period.
What happens if I pay late?
If you pay your corporation tax payment late, HMRC may collect any money outstanding in the following ways:
- Collect money from your pay cheque or pension.
- Take you to court!
- Make you file for bankruptcy.
- Take money from your bank or building society account.
- Seize your assets for sale
- Call debt collectors on you.
Essentially, if you don’t pay on time, HMRC has broad authority. It’s better to notify them as soon as you realise you won’t be able to pay. They may allow you to set up a payment plan.
What do I need to do to register for corporate tax?
To register to pay with HMRC, be sure you have these three items on hand:
- Your company’s registration number
- The date you began trading
- The date your yearly accounts are up to.
And do not forget. TaxScouts can assist you with your company’s taxes. Check out the service.
