Corporation Tax is a type of tax that every actively trading company in the UK has to pay on its net profit at the end of the fiscal year.

Contrary to popular belief, Corporation Tax is calculated not on the turnover of a company, but on the net profit after deducting the company expenses.

Companies with net profits below the £50k threshold at the end of the company fiscal year must pay 19% of their net income as corporate tax. Companies with net profits above the £50k threshold at the end of the company fiscal year must pay 25% of their net income as corporate tax.

Each and every company in the UK has to pay Corporation Tax on its net profit. However, you may not pay Corporation Tax if your company has not made any profits at the end of the relevant fiscal year.

The Corporate Tax statement of your company is made through the official portal of HM Revenue and Customs, together with the Unique Taxpayer Reference Code sent to you after your company was incorporated. After calculating your Corporation Tax on your tax return, HMRC collects the tax to be paid through the following payment methods:

- Debit Card

- Credit Card

- Direct Debit