Corporation tax accountant in Fulham

How corporation tax is worked out

The starting point is the profit in your company accounts. That figure is then adjusted for tax. Some costs that appear in the accounts are not allowed for tax, such as client entertaining and accounting depreciation. Others are added in, like capital allowances on equipment. The result is your taxable profit.

For the financial year that started on 1/4/2026, profits up to £50,000 are taxed at the small profits rate of 19%. Profits over £250,000 are taxed at the main rate of 25%. Between those two figures, marginal relief applies, which gradually raises the effective rate. The limits are divided if your company has associated companies, for example when the same person controls two businesses, and shortened if the accounting period is less than 12 months.

That middle band is where a lot of growing companies in Fulham and Hammersmith sit. The marginal rate on profit in that band is higher than the main rate, so the timing of large purchases or pension contributions can make a real difference.

Deadlines and payment dates

Corporation tax deadlines run from the end of your company accounting period, not the tax year. Paying before you file is normal and catches people out.

• Tell HMRC your company is active within 3 months of starting to trade
• Pay corporation tax 9 months and 1 day after the end of the accounting period
• File the CT600 return within 12 months of the end of the accounting period
• Large companies with very high profits pay in quarterly instalments instead

Reliefs and allowances we check

Making sure your company claims what it is entitled to is the core of the job. Most small companies have at least one of these to think about.

• Annual Investment Allowance on qualifying equipment, machinery and fittings
• Full expensing on new plant and machinery bought by companies
• Writing down allowances on cars, based on their emissions
• Research and development relief under the merged scheme for periods starting on or after 1/4/2024
• Using trading losses against other profits, earlier years or future years
• Employer pension contributions for directors and staff

How we prepare your return

We usually prepare the corporation tax computation at the same time as your year end accounts, so the two match. Once the draft accounts are ready, we show you the tax figure and explain how it was reached. That gives you a chance to ask questions and, where there is still time, to act before the year end.

We then file the CT600 with the accounts and computation, tagged in the iXBRL format HMRC requires. You receive a note of the exact amount and the payment reference. Many directors in Parsons Green and Earls Court set up a separate savings account and put a share of profit aside each month, and we can suggest an amount based on your figures.

Taking money out of the company

Corporation tax is only half of the picture for most directors. Once the company has paid its tax, you still need to get money out of it, and each route is taxed differently. Salary is a cost that reduces the company's taxable profit but may bring PAYE and National Insurance. Dividends are paid out of profit that has already been taxed, and are then taxed again on you personally. Employer pension contributions are usually deductible for the company and are not taxed on you when they go in.

We look at the combined position for you and the company rather than each tax on its own. For a consultant in Parsons Green with one client and steady profits, the answer is often quite different from a growing firm in Hammersmith that wants to keep cash in the business to hire staff.

Mistakes that lead to a bigger bill

HMRC charges interest on late corporation tax and penalties for late returns. These are the problems we see most often in new client files.

• Claiming client entertaining or personal costs as business expenses
• Not claiming capital allowances on laptops, furniture and tools
• Forgetting that associated companies share the rate limits
• An overdrawn director's loan account left unpaid 9 months after the year end, triggering an extra charge
• Assuming the payment date is the same as the filing date

What to have ready

If we are also preparing your accounts, the records you send for those cover most of what we need. On top of that, have details of any assets bought or sold in the year, any research and development projects, pension payments made by the company and any other companies you or your family control.

Send us an enquiry and we will review your last return and accounts for free. We agree a fixed fee before any work starts, and give you a clear timetable to the next deadline.

Common questions