Skip to main content
Business man investment consultant analyzing company annual financial report balance sheet statement working with documents graphs. Concept picture of business, market, office, tax.

How much Corporation Tax will I pay?

Corporation Tax is a tax on the profits of limited companies. The company (not HM Revenue and Customs) will work out how much Corporation Tax is payable on the profits.

What is the rate of Corporation Tax?

The current rate of Corporation Tax for all companies is 19% (from 1 April 2017). The Chancellor of the Exchequer has announced that Corporation Tax will fall to 18% in April 2020.

How do I work out my profits?

The profit calculated in the accounts is not necessarily the same as the profit on which Corporation Tax is calculated.

There may be some items which are not allowed for corporation tax purposes (your accountant will be able to help you with this).

In order to work out the profits on which corporation tax is payable, we will consider two steps:

Step 1: Adjust the profits from the accounts

  £ Explanation
Net Profit per Accounts 117,143 The profit before tax taken from the profit and loss account (income statement).
Add: Non-trading expenses 38,345 We add expenses which are not allowable as trading (business) expenses and have been included in the accounts. (See Which business expenses aren’t allowable? below for more information).
Less: Non-trading income 6,286 We deduct income which is not trading (business) income and has been included in the accounts. For example, income from property, interest received and profits from the sale of assets.
Less: Capital Allowances 62,413 We may be able to deduct capital allowances (see What are capital allowances? below for more information).
Adjusted profit 86,789 Then you have your adjusted profit.

Step 2: Calculate the total amount on which Corporation Tax will be paid

  £  Explanation
Adjusted profit 86,789 The adjusted profit is the figure we have calculated previously.
Less: Trading losses brought forward 6,000 Deduct any trading losses (unused) brought forward from a previous accounting period.
Add: Income from property 0 Add any income from property.
Add: Income after non-trading loan relationships 6,286 Add income from non-trading loan relationships, for most companies this will usually consist of bank and/or loan interest received.
Add: Chargeable Gains 0 Add chargeable gains. The most common examples are profits on the sale of shares, land and buildings and business assets.
Less: Charges on Incom 0 Companies can claim tax relief from qualifying charitable donations, by deducting the amount from its taxable profits, up to the extent that the taxable profits are reduced to £nil.
Profits chargeable to Corporation Tax 87,075 And finally, we have the profits chargeable to Corporation Tax.
Note that any dividends received are NOT included.

Corporation Tax calculator

Use our handy interactive calculator to work out how much Corporation Tax you'll pay.


Please note the results on the screen are estimates only. 

Please note the results on the screen are estimates only. 

Which business expenses aren’t allowable?

Expenditure must be “wholly and exclusively” incurred for trading (business) purposes.

Expenditure is deducted from income in the profit and loss account; therefore if it is not allowable it must be added back.

Below are some common examples of expenditure which is disallowable for corporation tax purposes and must be added back:

Expenditure Explanation
Capital expenditure and depreciation Capital expenditure is the purpose or improvement of fixed assets. Fixed assets are large items which are not bought to resell. For example, motor vehicles, buildings, office and computer equipment. 
Entertaining Client entertaining is not allowable. Staff entertaining is allowable of incurred wholly and exclusively for business purposes, for example team building. 
Donations Political donations and charitable donations to national charities are not allowable. Always keep a note of charitable donations as they may be allowable as a charge on income (see How do I work out my profits above). 
Penalties and fines These are not allowable as they relate to breaking the law.
Legal fees Legal fees relating to capital items or breaking the law are not allowable. 


When do I pay Corporation Tax?

Any Corporation Tax due must be paid electronically by nine months and a day after the accounting period end.

For example – a company with a year-end 31 December 2018 must pay any Corporation Tax due by 1 October 2019.

To find out when your due date, use our interactive Corporation Tax date calculator

End of Article
Share this content

Brought to you by:

Tide Business

Tide is a business account and app designed to save small businesses time and money. Manage your cards from within the app, set-and-forget your auto-categories, integrate with your accountancy software, then get back to doing what you love – growing your business.

View partner's profile

Register with Informi today:

  • Join over 20,000 like-minded business professionals
  • Create your own personalised account with curated reading lists and checklists
  • Access exclusive resources including business plans, templates, and tax calculators
  • Receive the latest business advice and insights from Informi
  • Join in the discussion through the comments section


I’ve been working through the how to start a business in 20 days ebook and so many of the things I’d done are now nicely tied together and some gaps now filled. I love the simplicity. Thank you.

Sarah Gosling – Gosling Charity Consulting

I love receiving my Informi emails. They’re always well written and engaging.

Jennifer Hobson – JEH Bookkeeping