Director information hub: Corporation Tax and VAT
Corporation Tax and VAT for limited companies.
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Limited companies pay:
- Corporation Tax
- VAT (Value Added Tax), if they are registered for it
What is Corporation Tax?
Limited companies pay Corporation Tax on their taxable profits.
You can also pay Corporation Tax on any company assets you sell.
You have to register to pay Corporation Tax.
You have to report if you do not think you owe any Corporation Tax in each tax year.
What is VAT?
VAT (Value Added Tax) is paid to HMRC by all limited companies that register for it.
You must register for VAT if the value of your taxable supplies go over the current VAT threshold.
Limited companies with a turnover below the current threshold do not need to register for VAT. Some, however, choose to do so.
You should speak to your accountant or financial adviser to find out if you need to register for VAT.
Appointing a representative to manage your tax affairs
Many companies choose to employ an accountant or tax adviser to make sure they are paying the correct amount of Corporation Tax and VAT on time.