When Do I Need to Register for Corporation Tax?

When Do I Need to Register for Corporation Tax?

If you're running a limited company or certain other organisations in the UK, you must register for Corporation Tax. Most new companies can do this at the same time as registering with Companies House, but the timing varies depending on your business structure and circumstances. This article explains when registration is required and the deadlines you need to meet.

Who needs to register for Corporation Tax?

You must register for Corporation Tax if you operate as:

• A limited company – any company registered at Companies House
• A foreign company with a UK branch or office (also called an overseas company)
• A club, co-operative or other unincorporated association – for example, a community group or sports club

Corporation Tax is charged on profits your company or organisation makes from trading, investments, and selling assets for more than they cost (known as 'chargeable gains').

If your company is UK resident for tax purposes, you pay Corporation Tax on all profits from the UK and abroad. If it's not UK resident but has a UK office or branch, you only pay Corporation Tax on profits from UK activities.

Registering a new limited company

When you register your company with Companies House, you'll get the option to set up for Corporation Tax at the same time. This is the easiest approach for most new companies.

If you don't register for Corporation Tax when setting up your company, you'll need to add Corporation Tax services to your business tax account separately. You can do this online through HMRC's systems.

Registering clubs and unincorporated associations

If you run a club, co-operative or other unincorporated association, you need to register for Corporation Tax using a different process from limited companies. HMRC has specific guidance for these organisations.

Non-UK companies disposing of UK property or land

When registration is required:

Non-UK resident companies must register for Corporation Tax if they dispose of (sell, gift or transfer ownership of) UK property or land. This applies if you:

• Are not registered with Companies House
• Were previously registered but your company is currently dormant for Corporation Tax purposes
• Are a collective investment vehicle (CIV) treated as a company and have not made a transparency election or exempt treatment election

Registration deadline:

You must register within 3 months of the date you become liable to UK Corporation Tax. You become liable when you sell, give or transfer ownership of UK property or land.

These rules apply to disposals made on or after 6 April 2019. Before this date, disposals were taxed under Self Assessment.

Exemptions from registration:

You don't have to register if:

• There is a no gain or no allowable loss transfer
• No gain arises because sales proceeds equal the acquisition cost
• The substantial shareholding exemption applies
• The disposal is a grant of a lease for no premium
• The disposal has an appropriate connection to a CIV and relief is provided under a Double Taxation Treaty

Simply holding UK property or land does not trigger a registration requirement – you only need to register when you dispose of the asset.

Other non-UK companies

Non-UK incorporated companies that aren't required to register with Companies House must register for Corporation Tax if they are:

• An offshore property developer dealing in or developing UK land or property
• Trading through a dependent agent permanent establishment (DAPE) in the UK
• A UK resident company (despite being incorporated overseas)

Different rules apply if you're a non-resident company landlord receiving UK rental income.

What happens after registration?

Once you've registered, HMRC will:

• Set up a HMRC record for your company
• Send you a Corporation Tax Unique Taxpayer Reference (UTR) by post
• Send you information about what to do next

HMRC aims to process registrations within 15 working days. For overseas companies, your UTR and further information will be sent to your overseas registered office. This can take 2 to 8 weeks to arrive.

After receiving your UTR, you'll need to:

1. Set up HMRC online services

2. Select 'add a tax to your account'

3. Select Corporation Tax – you'll then be sent an activation code by post

The activation code will also be sent to your overseas registered office and can take 2 to 8 weeks to arrive. You can request a new code if you don't receive it or it expires.

You cannot file your Company Tax Return before receiving your UTR.

If your company is dormant

If your company is not doing business, it may be dormant for Corporation Tax purposes. Dormant companies have different requirements and may not need to register or pay Corporation Tax.

Your obligations after registering

You don't get a bill for Corporation Tax. Instead, you must:

• Keep company and accounting records
• Prepare a Company Tax Return to work out how much Corporation Tax to pay
• Pay Corporation Tax or report if you have nothing to pay by your deadline
• File your Company Tax Return even if you make a loss or have no Corporation Tax to pay

You'll face penalties if you don't file your Company Tax Return by the deadline, and you may be charged interest if you pay your Corporation Tax late.

Sources

• Corporation Tax
• Corporation Tax for non-UK incorporated companies
• Register a non-resident company who disposed of UK property or land for Corporation Tax

This article provides general guidance based on current HMRC rules. For advice specific to your situation, speak to your accountant.