Have you ever wondered why HMRC sends you a penalty notice even though your limited company paid its corporation tax on time? The answer usually lies in the CT600, the official corporation tax return form that many directors treat as an afterthought. Unlike a personal tax return, the CT600 is a separate filing from your company's statutory accounts, and getting the two to match is where most mistakes happen.

The CT600 must be filed online within 12 months of the end of your company's accounting period. But here is the trap: the corporation tax itself must be paid within 9 months and 1 day of that same period end. If you file early but pay late, you still incur interest. Conversely, if you pay on time but file late, the automatic £100 penalty still applies. For a second late filing within 12 months, the penalty jumps to £200, and for a third, it becomes 10% of the unpaid tax. Many e-commerce sellers and software companies trip up here because they focus on the payment date and forget the separate filing deadline.

The rate you pay depends entirely on your company's taxable profits. For 2025/26, the structure is:

  • Profits of £50,000 or less: the small profits rate of 19% applies.
  • Profits between £50,000 and £250,000: marginal relief gradually increases the effective rate from 19% up to 25%.
  • Profits above £250,000: the main rate of 25% applies.

Consider a manufacturing SME with taxable profits of £180,000. Its corporation tax liability is not a simple 25% of £180,000 (£45,000). Instead, marginal relief applies. The calculation works out to roughly £180,000 x 25% minus marginal relief of (£250,000 - £180,000) x 3/200, giving a total liability of around £37,950. That is over £7,000 less than the headline 25% rate would suggest. Many construction subcontractors and hospitality operators miss this relief because they assume the main rate applies as soon as profits exceed £50,000.

The CT600 itself comes with supplementary pages for companies claiming R&D tax credits, making group relief elections, or reporting loans to participators. Most independent retailers and professional services firms will only need the standard form. Alongside the CT600, you must submit your company's statutory accounts and a corporation tax computation. HMRC cross-references these documents, so if your accounts show turnover of £500,000 but your CT600 shows £450,000, expect questions.

A common pitfall for healthcare practices and sole-trader trades that have recently incorporated is forgetting to include disallowable expenses. Entertaining clients, for example, is not an allowable deduction for corporation tax purposes, yet many directors include it in their profit figure without adding it back. The CT600 computation must adjust for these items, or you understate your taxable profits and face HMRC corrections later.

From 6 April 2026, the main rate of corporation tax stays at 25%, and the small profits rate remains at 19% for now. The CT600 form itself does not change, but the marginal relief bands and effective rates will reflect the same thresholds. If your company's profits are close to the £50,000 or £250,000 boundaries, planning ahead with pension contributions or capital purchases before the year end can keep you in a lower effective rate band.

When this matters for UK business owners: Every limited company must file a CT600 annually, even if dormant or loss-making. The filing deadline is generous at 12 months, but the payment deadline at 9 months is the real pressure point. Understanding how the CT600 interacts with your dividend strategy, salary decisions, and capital allowances allows you to structure your affairs efficiently and avoid the penalties that come from treating the form as a routine afterthought.