Since April 2023, the UK Corporation Tax (CT) rate increased from 19% to 25% for companies with profits over £250,000, with a small profits rate of 19% for profits up to £50,000 and marginal relief in between. For Indian entrepreneurs and businesses with UK subsidiaries or trading companies, understanding UK CT compliance is essential — even if the company is managed from India.
UK Corporation Tax Rates (2024-25)
| Profit Level | Tax Rate |
|---|---|
| Up to £50,000 | 19% (Small Profits Rate) |
| £50,001 to £250,000 | 19%–25% (Marginal Relief applies) |
| Over £250,000 | 25% (Main Rate) |
The marginal relief fraction tapers the effective rate between 19% and 25% for companies with profits in the middle band.
CT600 Filing Deadline
- CT600 (Corporation Tax Return) must be filed within 12 months of the end of the accounting period.
- Corporation Tax payment is due 9 months and 1 day after the end of the accounting period (e.g., for a 31 March 2025 year-end, CT is payable by 1 January 2026).
- Statutory Accounts must be filed with Companies House within 9 months of the year-end for private companies.
- Large companies (taxable profits over £1.5 million) must pay CT in quarterly instalments.
Key CT Reliefs Available
- Annual Investment Allowance (AIA): 100% first-year deduction on qualifying plant and machinery expenditure (up to £1 million/year).
- R&D Tax Relief: Enhanced deduction or payable credit for qualifying R&D expenditure — available to companies of all sizes under the merged RDEC scheme from April 2024.
- Capital Allowances (WDA): Writing Down Allowances on assets — 18% on main pool, 6% on special rate pool per year.
- Loss Relief: Trading losses can be carried back 1 year or carried forward indefinitely against profits of the same trade.
- Patent Box: Effective 10% CT rate on profits attributable to patented inventions.
Managing UK CT from India: Practical Tips
- Ensure your UK company's accounting period aligns with your preferred year-end (12-month maximum per CT return).
- Maintain digital records using HMRC-recognised software (Xero, FreeAgent, QuickBooks) — required for MTD compliance.
- Register your company with HMRC for Corporation Tax immediately after incorporation — HMRC sends a CT41G notice to the registered office.
- Appoint a UK tax advisor or India-based firm with UK expertise (like TNGS LLP) to manage CT compliance remotely.
- Be aware of the HMRC late filing penalty — £100 for up to 3 months late, £200 for 3–6 months, plus tax-geared penalties for 12+ months.