///
Glossary

Corporation Tax:

/ˌkɔː.pəˈreɪ.ʃən tæks/ noun Tax you pay on business profits, when registered as a limited company.

You must pay Corporation Tax on profits from doing business as a limited company.

You must register for Corporation Tax when you start working for yourself as a limited company.

Corporation Tax is 25%, or 19% for companies with profits below £50,000.

As an individual, you’ll still be paying Income Tax on any money you earn from your business, but Corporation Tax is a separate tax payable by the company.

If you’re registered as a sole trader, Corporation Tax is unlikely to apply to you.

Advice and guides from the ecosystem

gov.uk
Corporation Tax
Official guidance from HMRC on Corporation Tax
Unbiased
How much is corporation tax and what are the reliefs?
Useful guide to understanding Corporation Tax and reducing your liability

Related Glossary Terms

Income Tax
Tax due payable to anyone earning over a certain income in the UK, and the primary tax you'll pay when you're self-employed
VAT
Value Added Tax, additional tax you'll be charging your customers and liable to pay to HMRC, when your turnover is over £90,000
Self Assessment
The process of calculating and reporting your income and expenses to HRMC each year, rather than being taxed at source.
Sole Trader
A sole trader is considered to be ‘self-employed', and is the singular owner of a business, entitled to keep all profits but liable for all losses.
Limited Company
A limited company is one of the legal formations of a business in the UK. Whilst you're not technically self-employed if you're a limited company director, many sole-owners of limited companies describe themselves as self-employed.
Last Updated:

Know exactly when to learn more about Corporation Tax

Join Flightplan to understand every stage and task you'll need to complete to start freelancing - including when you need to think about Corporation Tax

Register to be the first to hear when Flightplan takes off.

Subscribe