When to register for Corporation Tax
Forming a company at Companies House and registering it for Corporation Tax are two different things, and the second one has a deadline that catches new directors out.
The three-month rule
A company must tell HMRC that it is within the charge to Corporation Tax within three months of starting to trade, or more precisely, of becoming active. Registration is done online through the company's Government Gateway account, and HMRC will then issue the notices that set the company's filing obligations.
What counts as being active
A company is generally treated as active once it starts carrying on business activity. That includes obvious things such as selling goods or services, but also earlier steps like buying stock, employing someone, advertising, or earning interest. Simply owning a dormant company that does nothing does not trigger the requirement, though HMRC should still be told the company is dormant if it writes to ask.
What happens after you register
- HMRC issues the company's Unique Taxpayer Reference, if it has not already.
- An accounting period for Corporation Tax begins, normally matching the company's financial year.
- The company must file a Company Tax Return after each period, and pay any Corporation Tax due, generally nine months and one day after the period ends.
Note the ordering trap: the payment deadline falls before the filing deadline. The tax is usually due nine months and one day after the year-end, while the return itself can be filed up to twelve months after. Waiting for the return to be finished before thinking about the bill is how surprises happen.
Registering late
Telling HMRC late can mean penalties, and the longer the delay the less sympathetic the outcome. If you have missed the window, the practical advice is simple: register now, bring the records up to date and, if there is tax owing, get ahead of the correspondence rather than waiting for it.
This note is general guidance, not advice on your circumstances. If you are setting up a company or have discovered a registration gap, talk to us and we will help you put it right.