Corporation Tax

A generation or storage project raises a different tax question in each phase. During development the question is whether spend is deductible now or stuck as capital. During construction it is which pool each item of plant lands in and which allowance beats which. Once the site exports power it becomes ordinary trading income, corporation tax and VAT. The figures that decide it in 2026/27 are the £1,000,000 Annual Investment Allowance, the 40% first-year allowance from 1 January 2026, the main-rate writing-down allowance falling from 18% to 14%, and the 26.5% marginal corporation tax rate.

Three dates move factory capital allowances in 2026: the 40% first-year allowance from 1 January 2026, and the main-rate writing-down allowance falling from 18% to 14% on 1 April 2026 for companies and 6 April 2026 for unincorporated businesses. If your year end is not 31 March or 5 April you get a hybrid rate. This page works one factory's spend through the chronology and shows which allowance to point at which purchase.

The stock figure you sign off at the year end is the stock figure HMRC taxes you on, because trading profit is computed on the accounts. This page builds one product's cost line by line (materials, loaded labour, absorbed overhead, scrap and rework), values part-finished batches, and takes the closing stock movement through to corporation tax, with every figure recomputable.

Corporation tax is 19% up to £50,000 of profit and 25% above £250,000, but those limits are divided by your number of associated companies. Two companies under common control get £25,000 and £125,000 each; three get £16,667 and £83,333. Here are the control tests that decide which companies count, the exclusions that take a company out of the count, and worked examples of what the division costs.

A clear breakdown of how corporation tax and dividend tax work together for UK limited company directors. Includes 2026/27 rates, real worked examples, and practical guidance on salary versus dividend planning.

Marginal relief bridges the 19% small profits rate and the 25% main rate for companies with profits between £50,000 and £250,000. The relief is a deduction from tax at 25%, calculated with the statutory 3/200 fraction. Here is the formula worked at real profit levels, the augmented profits trap, short periods, and why each extra pound in the band actually costs 26.5p.

Electric vehicle charging points installed by your company can qualify for 100% first year allowances or full expensing in 2026/27. The rules depend on whether you install them for staff, customers, or as part of a property development. We explain exactly what qualifies and how to claim.

Finance Act 2026 made the biggest changes to capital allowances since full expensing arrived. The main-rate writing down allowance fell from 18% to 14%, a new 40% first-year allowance applies to new main-rate plant and machinery from 1 January 2026, and the £1 million AIA and 6% special rate continue unchanged. This guide brings every 2026/27 allowance into one place: AIA, full expensing, the 40% FYA, both writing down allowance pools, and the specific rules for vans, cars and integral features.

Most companies pay corporation tax in a single payment 9 months and 1 day after their accounting period ends. If you pay early, HMRC pays you credit interest at 2.75% (from 9 January 2026) on any overpayment. If your company's augmented profits exceed £1.5 million, quarterly instalment payments (QIPs) are compulsory, and very large companies with profits over £20 million must pay even earlier.

A quick reference for the annual investment allowance. The AIA gives 100% tax relief on qualifying plant and machinery up to a permanent £1,000,000 per 12-month period, for companies, sole traders and partnerships, on new and second-hand assets alike. The core numbers, one worked example, and links to our detailed guides on claiming mechanics and relief-choice planning.

The Annual Investment Allowance (AIA) lets you claim 100% tax relief on qualifying plant and machinery costs up to £1m per year. We explain what qualifies, how the £1m limit works, and how to claim it on your corporation tax return.

The Annual Investment Allowance gives 100% tax relief on most plant and machinery up to £1,000,000 per 12-month period, permanently. This guide covers the claiming mechanics in detail, what qualifies and what does not, vans versus cars, second-hand and connected-party purchases, how associated companies share one limit, short and straddling periods, private-use apportionment, and how the claim goes on the CT600 or self assessment return. For what the AIA is and how it compares with the other reliefs, see our annual investment allowance explained guide.

The Annual Investment Allowance (AIA) gives 100% tax relief on qualifying plant and machinery costs up to £1m per year. This post covers the 2024/25 rates, what qualifies, how to claim, and common pitfalls to avoid.

The AIA limit for 2025/26 is £1,000,000 and it is permanent. The allowance itself did not change in 2025, but the rules around it did. Double cab pickups became cars for capital allowances from April 2025, a new 40% first-year allowance arrived on 1 January 2026, and the main-rate writing down allowance fell from 18% to 14% from April 2026. This page sets out the year-specific position, with worked figures for 2025/26 periods and for periods that straddle the April 2026 rate change.

The Annual Investment Allowance (AIA) lets you claim 100% tax relief on qualifying plant and machinery costs up to £1m per year. This guide covers the 2025/26 rules, what qualifies, and how to maximise your claim.

The Annual Investment Allowance (AIA) lets UK businesses claim 100% tax relief on qualifying plant and machinery costs up to £1 million per year. This guide covers the 2025/26 rates, what qualifies, what doesn't, and how to make a claim on your corporation tax return.

The Annual Investment Allowance (AIA) covers most second-hand plant and machinery, but there are specific exclusions. This guide explains what qualifies, what doesn't, and how to claim correctly.

The Annual Investment Allowance (AIA) lets most businesses deduct the full cost of qualifying plant and machinery from their taxable profits in the year of purchase. This guide explains what qualifies, what does not, and how to claim it on your corporation tax return.

Seven fully worked capital allowances examples using the 2026/27 rules. A sole trader claiming AIA on a second-hand van, a company combining full expensing and AIA on one purchase list, the April 2026 straddling-period hybrid writing down allowance rate, cars by CO2 emissions band, private-use apportionment, a balancing charge on disposal, and the small pools write-off. Every figure is shown line by line so you can follow the computation into your own numbers.

Capital allowances on property let you claim tax relief on the cost of certain fixtures, fittings, and building features. This guide explains what qualifies, how to calculate your claim, and the key rules for commercial properties. Note that the furnished holiday lettings regime was abolished from April 2025.

Vans qualify for 100% Annual Investment Allowance, full expensing (companies only, new vans) and the new 40% FYA from April 2026 on new main-rate plant. From 1 April 2026 (CT) and 6 April 2026 (IT) the fallback writing-down allowance drops from 18% to 14% per FA 2026 s.28. This guide covers what qualifies as a van, how each allowance works, private use rules, electric vans, double cab pickups post-April 2025, and the disposal balancing charge.

If you buy a second hand van for your business, you can claim capital allowances on the cost. A second hand van always goes into the main rate pool (WDA 14% from April 2026, was 18%), regardless of CO2 emissions. You can also claim 100% in year one via the Annual Investment Allowance. We explain the rules so you get the right relief.

Full expensing lets limited companies deduct the full cost of most new plant and machinery from taxable profits in the year of purchase. It is a permanent relief introduced from April 2023, replacing the temporary super-deduction. This guide covers what qualifies, what does not, and how to claim on your CT600.

Integral features capital allowances let you claim tax relief on the building services that make a property functional: heating, lighting, ventilation, lifts, and more. This guide explains what qualifies, how to claim, and the rates that apply for 2025/26.

The Annual Investment Allowance (AIA) gives UK businesses 100% tax relief on qualifying plant and machinery spending up to £1m per year. This guide explains what qualifies, how to claim it, and how it interacts with other capital allowances.

Writing down allowance (WDA) is the capital allowance method for cars that don't qualify for full expensing or the annual investment allowance. The rate you get depends entirely on the car's CO2 emissions. This guide covers the 2025/26 and 2026/27 rules, including the reduction in the main pool rate from 18% to 14% from April 2026 under FA 2026 s.28.

Writing down allowance rates are 14% for the main pool and 6% for the special rate pool for chargeable periods beginning on or after 1 April 2026 (companies) or 6 April 2026 (sole traders and partnerships). Finance Act 2026 section 28 cut the main rate from the 18% that applied for 2025/26 and earlier; the special rate is unchanged. Accounting periods that straddle the change use a time-apportioned hybrid rate. This guide covers the writing down allowance calculation, the two pools, the straddle rules, and when a WDA beats (or loses to) the AIA, full expensing and the new 40% first-year allowance.

The annual investment allowance (AIA) lets a UK business deduct the full cost of qualifying plant and machinery from taxable profits in the year of purchase, up to a permanent £1,000,000 cap. This guide explains what the AIA is, how much tax it actually saves, how it compares with writing down allowances, full expensing and the new 40% first-year allowance, and the situations where claiming it is the wrong move.

A practical guide for UK company directors calculating corporation tax when the business earns both trading profits and investment income. Includes a worked example using 2025/26 rates, explains how investment income affects marginal relief, and covers the filing rules on the CT600 return.

Paying a rent charge to a connected company can shift profits and reduce your overall corporation tax bill, but only if the rent is at market value. HMRC's transfer pricing rules prevent artificial pricing between connected parties. Here is what you need to know to structure this properly without triggering an investigation.

A clear explanation of how corporation tax and dividend tax interact for UK company directors. We cover the 2026/27 rates, the profit extraction process, and practical planning now that the April 2026 dividend rate rise has narrowed the company's edge over a sole trader.

If your limited company sells a capital asset for less than its original cost, you can offset that loss against chargeable gains in the same or future accounting periods. Here is how corporation tax capital loss relief works, what qualifies, and the traps to watch for.

If your company's year end is 31 March 2026, your corporation tax return (CT600) must be filed with HMRC by 31 March 2027 (12 months after the period end). Your corporation tax payment is due 9 months and 1 day after year end, which falls on 1 January 2027. Your Companies House accounts are due 31 December 2026 (9 months). Here is the exact timeline, what happens if you miss it, and how to get it right.

If your new company makes a loss in its first year, you do not pay corporation tax on those losses. But you have several options for how to use that loss to reduce tax in future or past profitable periods. This article explains the loss relief rules for a company in its first accounting period.

If HMRC owes your company money after it has been dissolved, you can still claim it back. This guide covers how to get a corporation tax refund for a closed company, including the Bona Vacantia rules and the process for restoring a company.

Creative industry tax reliefs in the UK offer significant corporation tax savings for film, TV, video games, theatre, and other creative productions. This guide explains the different reliefs available, the rates, who qualifies, and how to make a claim.

If HMRC opens an enquiry into your company's corporation tax return and finds errors, you face penalties, interest, and potentially a formal investigation. Here is what actually happens, from the opening letter through to closure, and how to respond.

If your new limited company makes a loss in its first year, you still file a corporation tax return (CT600) but pay zero tax. The loss can be carried forward against future profits or, in some cases, carried back against earlier profits. This article explains the loss relief options, the filing requirements, and the traps to watch for.

Corporation tax is paid by the company itself, not the shareholders. But when you have multiple shareholders, the decisions around dividends, director loans, and profit extraction become more complex. This guide explains how corporation tax interacts with your ownership structure.

Corporation tax is a company-level tax that applies before any profits are distributed to shareholders. But in a multi-owner company, the way you structure shareholdings, pay dividends and manage director loans all interact with the corporation tax position. This guide explains how it works in practice.

The UK corporation tax rates are 19% on profits up to £50,000 and 25% on profits over £250,000, with marginal relief in between. The rates are the same for 2025/26 and 2026/27. This guide shows exactly what you pay at every profit level, how associated companies shrink the thresholds, when the bill is due, and the reliefs that reduce it.

Paying rent to a connected company can reduce your corporation tax, but HMRC's transfer pricing rules mean you must charge a market rate. This article explains the rules, the risks, and how to structure it properly.

A corporation tax accountant handles your CT600 return, calculates your tax bill including marginal relief, and advises on timing of payments. They also spot reliefs and allowances you might miss. Here is what the service actually covers for a UK limited company director.

Missing your corporation tax filing deadline by even one day triggers an automatic £100 penalty. More penalties follow at 3 months, 6 months and 12 months after the filing deadline. Here is what you need to know, how much you will owe, and what to do immediately.