The Corporation Tax main rate will increase to 25% from 1 April 2023 for companies with profits over £250,000. A Small Profits Rate (SPR) of 19% will also be introduced from the same date for companies with profits of up to £50,000 ensuring these companies pay Corporation Tax at the same rate as currently.

Where a company has profits between £50,000 and £250,000, a marginal rate of Corporation Tax will apply that bridges the gap between the lower and upper limits. The lower and upper limits will be proportionately reduced for short accounting periods of less than 12 months and where there are associated companies.

The effect of marginal relief is that the effective rate of Corporation Tax gradually increases from 19% where profits are £50,000 or less to 25% where profits are more than £250,000.

The amount of tax you pay will be found by multiplying your profits by the main rate of 25% and deducting marginal relief. For the fiscal year 2023, the marginal relief fraction is 3/200.

Companies often have to contend with having two different company accounting periods. This is because there are different rules for Companies House filings and for HMRC to whom any Corporation Tax due is paid.

The accounting periods can be the same but can also differ and a change may be needed to ‘sync’ the accounting periods. As a general rule, the Companies House rules are more flexible and under certain circumstances it is possible to make a change to the year end. The Companies House accounting period can sometimes run for more or less than 12 months.

A tax accounting period for Corporation Tax purpose cannot be longer than 12 months. This can create the unusual scenario whereby a company will be required to file two returns with HMRC if an accounting year is longer than twelve months.

If your accounts cover less than 12 months, then your accounting period will normally end on the same day and will also be shorter than 12 months. This can happen if the company stops trading or shortens its company’s year-end date (also known as its accounting reference date).

HMRC can be called by phone on 0300 200 3410 for help with general Corporation Tax enquiries. You will need your 10-digit Unique Tax Reference (UTR) when calling HMRC and this reference number cannot be provided over the phone.

The UTR is the primary identifier for a company and should be used whenever HMRC is contacted. The number can be found on all letters from HMRC and also in HMRC’s business tax account portal – if the company has registered for online tax services and attached the UTR to their profile.

HMRC’s Corporation Tax phone lines are open Monday to Friday: 8am to 6pm and closed weekends and bank holidays. The phone lines are typically less busy between 8.30am and 11am.

You can also write to HMRC at the following address for help with general Corporation Tax enquiries.

Corporation Tax Services
HM Revenue and Customs
BX9 1AX
United Kingdom

You should include your UTR in the letter and on the first page of any documents you send. If you are replying to a letter you’ve received about your Corporation Tax, you should use the address on that letter.

The Structures and Buildings Allowances (SBA) allows for tax relief on qualifying capital expenditure on new non-residential structures and buildings. The relief applies to the qualifying costs of building and renovating commercial structures. 

The relief was introduced in October 2018 at an annual capital allowance rate of 2% on a straight-line basis. The annual rate was increased to 3% from April 2020, and the corresponding period reduced to thirty-three and one-third years. 

HMRC’s guidance sets out the process for making a claim. In order to make a valid claim a written allowance statement is required. 

The allowance statement must include:

• information to identify the structure, such as address and description
• the date of the earliest written contract for construction
• the total qualifying costs
• the date that you started using the structure for a non-residential activity

The claimant must also meet the necessary requirements in respect of the building itself and the chargeable period for the claim. 

The start date of the claim is the later of the following two dates:

• the date when you started using the structure for a qualifying activity
• the date that you are due to pay for the structure or construction.

No relief is available where parts of the structure qualify for other allowances, such as plant & machinery allowances.

If a company has stopped trading and has no other income, then the company is usually classed as dormant for Corporation Tax purposes. 
A company is usually dormant for Corporation Tax if it:

• has stopped trading and has no other income, for example investments
• is a new limited company that hasn’t started trading
• is an unincorporated association or club owing less than £100 Corporation Tax
• is a flat management company.

There is a special online form that can be used to advise HMRC if a company is dormant. The form can be found at www.gov.uk/tell-hmrc-your-company-is-dormant-for-corporation-tax. In order to complete the form, you will need the company’s name, 10-digit Unique Taxpayer Reference (UTR) and the date the company ceased trading. 

HMRC can also send a notification if they think a company is dormant. This notice will state that a company or association is dormant and is not required to pay Corporation Tax or file Company Tax Returns.

Limited companies are still required to file annual accounts and a confirmation statement even if the company is dormant for Corporation Tax and dormant according to Companies House. A company defined as 'small' by Companies House can instead file 'dormant accounts' and does not have to include an auditor’s report.

A company can stay dormant indefinitely, however there are costs associated with this option. This might usually be done if for example a company is restructuring its operations or wants to retain use of a company name, brand or trademark.