Capital allowances
Full expensing on qualifying plant and machinery, the annual investment allowance, and the fixtures inside a commercial property that are routinely missed on purchase.
Corporation tax returns, and the planning that decides the bill.
The bill depends on capital allowances, how you take money out, how losses are used and timing decided before the year end closes. We plan those with you, then prepare and file the return.
What you get
- Capital allowances claimed properly
- How you take money out, planned
- Losses used deliberately
- Associated companies accounted for
- CT600 filed with iXBRL tagging
Corporation tax
Corporation tax is charged on company profits at 19% up to £50,000 and 25% above £250,000, with marginal relief in between that produces an effective rate of 26.5% on the profit in the middle band. Those thresholds are divided by the number of associated companies, which is the detail that surprises people who own two.
Most of the bill is decided during the year: what got claimed, how the owner was paid, and whether spending that qualifies for relief was identified in time.
What we check before the return
R&D relief
We claim it where the work qualifies and tell you where it does not. The compliance regime has tightened and a weak claim now carries real risk.
How the owner is paid
The salary and dividend mix, employer pension contributions from the company, and whether a director's loan is quietly building a s.455 charge.
Losses
Carried back, carried forward, or surrendered in a group. We choose the use that saves the most tax.
Timing
Bringing a purchase forward or pushing a disposal back can move profit across a rate boundary. This has to be decided before the year end.
Associated companies
Two companies halve the thresholds, so a £60,000 profit can be taxed at a materially higher rate than the owner of a single company would pay on the same money.
How corporation tax work runs with the accounts
- 1A planning conversation before the year end
Most of the planning on capital allowances, pay and losses has to be done before the period closes.
- 2The computation prepared with the accounts
So the two agree, and the tax charge in the accounts is the tax you will actually pay.
- 3The CT600 filed with HMRC
With the accounts and computations tagged in iXBRL as HMRC requires.
- 4Payment due at nine months and a day
You get the figure and the reference well before that. Companies with profits over £1.5m pay in quarterly instalments instead, and we will tell you if you are heading that way.
Key figures
These are the two main rates, the effective rate in the marginal band, the associated company rule and the payment date.
19% / 25%Below £50,000 and above £250,000
26.5%The effective rate on profit in between
÷ byThe number of associated companies, both limits
9m + 1dAfter your year end, the tax is due
2026/27 figures. See key tax dates and the calculators for the full picture.
How an associated company changes the bill
Two companies, £60,000 of profit each
The same owner, both companies trading, year to 31 March 2027. The corporation tax limits are divided by the number of associated companies, so two companies means half the limits each — £25,000 and £125,000 rather than £50,000 and £250,000.
- Profit, each company
- £60,000
- ONE COMPANY — 25% of £60,000
- £15,000
- less marginal relief, 3/200 × (£250,000 − £60,000)
- −£2,850
- Tax if it stood alone
- £12,150
- TWO COMPANIES — 25% of £60,000
- £15,000
- less marginal relief, 3/200 × (£125,000 − £60,000)
- −£975
- Tax with one associated company
- £14,025
- Extra tax across the two companies
- £3,750 a year
The second company adds £1,875 of tax in each company, every year, with no change in either business.
Worked through at 2026/27 rates from our own calculators, which follow gov.uk guidance checked in July 2026. This is an example and your figures will differ.
Common corporation tax mistakes
- Waiting until the return
- Everything that changes the bill — capital allowances, the pension contribution, how you took money out, whether a loss is carried back or forward — had to be decided before the period closed.
- A director’s loan nobody watched
- Money drawn that is neither salary nor dividend. Left outstanding nine months after the year end it attracts a charge on the company, refundable only long after the loan is repaid. It is entirely avoidable if somebody is looking at the account in month eight.
- An R&D claim that will not stand up
- HMRC’s enquiry rate on research and development claims has risen sharply. A weak claim can cost more in enquiry and repayment than it paid out.
- Losses left sitting
- Carried back against last year, a loss is cash now; carried forward it is relief later; surrendered in a group it may be worth more elsewhere. If nothing is decided, the loss is carried forward, which is the slowest of the three.
What people ask about corporation tax
What are the current rates?
19% on profits up to £50,000 and 25% above £250,000, with marginal relief between the two giving an effective 26.5% on profits in that band. Both thresholds are divided by the number of associated companies.
When do I pay it?
Nine months and one day after the end of the accounting period. The return itself is not due for twelve months, so the money is due before the paperwork is — which catches out a lot of first-year companies.
Can I pay myself in dividends to reduce it?
Dividends are paid out of post-tax profit, so they do not reduce corporation tax at all. They reduce the tax you pay personally compared with salary. An employer pension contribution is the one that genuinely reduces the company's bill, and it is often the better answer.
What is a director's loan and why does it matter?
Money taken out that is neither salary nor dividend. If it is still outstanding nine months after the year end, the company pays a 33.75% s.455 charge on the balance — refundable, but not for a long time. We flag it before the year end, when it can still be cleared.
Do you handle R&D claims?
Yes, where the work meets the definition. We are conservative: HMRC's enquiry rate on R&D has risen sharply, and a claim that does not stand up can cost more than it paid.
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