Corporation Tax Act 2010
What this means for your business
- Enforced by
- HMRC
- Applies to
- United Kingdom
- On this page
- 19 compliance obligations, 14 practical guides across 2 topics
What you must do
19 compliance obligations under this legislation.
Risk assessment 2
Adjust corporation tax when CITR is withdrawn or reduced
If your company has received Corporate Income Tax Relief (CITR) and later HMRC decides that relief must be withdrawn or reduced, you must file a new corporation‑tax assessment for the accounting period in which the relief was claimed. This must be done within six years of the end of that accounting period.
Ensure you are not an accredited community development finance institution when investing
If your business (or you personally) makes an investment that falls under the Corporation Tax rules, you must check that you are not recognised as a community development finance institution under the Income Tax Act 2007 at the time of the investment. In practice, you need to confirm your accreditation status before completing any investment transaction.
Management duties 6
Allocate charitable excess expenditure to earlier accounting periods
If your charitable company has spent more than its allowed charitable expenditure in a tax year, you must check earlier years (up to six years back) to see if they had enough surplus income to absorb the excess. You then allocate the excess to the most recent qualifying year, making sure you don’t allocate more than the surplus available in that year.
Do not contribute capital when investing in a partnership CDFI
If your business invests in a Community Development Finance Institution (CDFI) that is set up as a partnership, you must not put any of your own money into the partnership as capital – even if you label it as a loan and the partnership records it as partner’s capital. In practice, you need to structure the investment so that you become a creditor, not a partner.
Ensure share distribution meets tax relief conditions
If your company transfers shares in a subsidiary to claim corporation tax relief under section 1076(a), you must make sure the shares are not redeemable, that they represent essentially all of your holding and voting rights in that subsidiary, and that after the transfer your company is still a trading company or the holding company of a trading group – unless a specific exemption (e.g., 75 % subsidiary rule) applies. Check these facts before carrying out the share transfer.
Ensure shares meet cash‑payment and non‑redeemable conditions
If you buy shares to qualify for the tax relief in the Corporation Tax Act, the shares must be paid for entirely in cash, be fully paid up on the investment date, and must not carry any right to be redeemed or converted into a loan or other redeemable security for five years. You need to check the share terms and keep proof of cash payment before the investment date.
Ensure you are the sole beneficial owner of any investment
When your business makes an investment – whether by buying shares or providing a loan – you must be the only person who directly benefits from it. If anyone else has a beneficial interest, the investment may not qualify for the tax treatment you expect, so you need to check and confirm ownership before proceeding.
Keep post‑sale shareholding below 75% of pre‑sale level
If you sell shares in your company but still hold some (or your associates hold some) right after the sale, you must make sure the total shareholding you retain is no more than 75% of what you owned before the sale. This calculation must be done immediately after the transaction, otherwise you may lose tax relief.
Notifications 2
Notify HMRC if REIT conditions are breached
If your company is a UK REIT and any of the REIT conditions A, B, E or F stop being met, you must tell HMRC as soon as reasonably possible. Failure to do so could lead to the REIT status being automatically terminated at the end of the previous accounting period.
Notify HMRC of any tax‑return error caused by a chargeable payment
If you have filed a corporation tax return and later discover that a loan or advance from your close company (a "chargeable payment") makes the return incorrect, you must inform HMRC of the needed amendment. The notice has to be sent within three months of the date you became aware of the error.
Registration and licensing 1
Meet approval tests for housing association status
If you run a housing association and want the relevant authority to approve you, you must satisfy a set of five tests. These include being recognised as a housing association, being a registered society, restricting membership to tenants, and complying with any additional requirements or conditions set by the Secretary of State, Welsh Ministers or the Department for Social Development.
Reporting and filing 8
Apply for advance clearance and provide required details on time
If you want HMRC to give you advance clearance for a payment, you must submit a written application that includes all the needed details of the transaction. HMRC can ask for more information, and you must supply it within 30 days (or any longer period they allow). Failure to do so means HMRC can stop the process and any decision they make may be invalid if the information was inaccurate.
Calculate and report all profits and gains in sterling
When you prepare your company’s corporation tax return you must work out the profit and any chargeable gains in British pounds and show the figures in sterling. This applies regardless of the currency you use for your day‑to‑day bookkeeping.
Notify HMRC of exempt distributions within 30 days
If your company makes an exempt distribution (for example a dividend that is not chargeable to corporation tax), you must send a return to HMRC within 30 days. The return must explain what was distributed and why it qualifies as exempt. Failure to do so could attract penalties.
Send tax certificates for dividend or interest payments
Whenever your company pays a dividend or interest, you must issue a tax certificate for that payment. The certificate has to be sent to the bank or building society holding the recipient’s account, or directly to the recipient if the payment is not made into an account. It must be sent within a reasonable period after the payment is made.
Serve notice on corporation tax within the 3‑year time limit
When HMRC finalises your corporation tax liability for an accounting period, the company must give a notice under this part of the Act within three years of that determination. If you’re dealing with a self‑assessment or discovery assessment the deadline can be earlier – it may relate to the completion of an enquiry, an amendment or the final appeal, but you always have to serve the notice before the relevant time expires.
Submit group allowance allocation statement to HMRC
If your company is the nominated company for a corporate tax group, you must send HMRC a group allowance allocation statement for each accounting period. The statement must be filed by the latest of several possible dates (usually within a year of your company tax return filing, or within 30 days of any enquiry, amendment or appeal). If the statement would allocate no allowance, you can skip it.
Submit group allowance allocation statement to HMRC
If your company is the nominated member of a corporate group, you must send a group allowance allocation statement to HMRC for each accounting period. The statement must reach HMRC within 12 months of the period’s end (unless you get specific permission to file later). If you stop being the nominated company, the new nominated company must file instead.
Submit tax claim within two years in prescribed form
If your self‑build society wants to claim relief under sections 651 or 652, you must lodge the claim no later than two years after the relevant accounting period ends (or the part of it you’re claiming for). The claim must use the form and details that HMRC prescribes, and you can only claim if the society met the required occupancy and compliance conditions.
Practical guidance
Our guides explain how to comply with the requirements above.
Tax & Finance 13
Corporation Tax basics
Understanding and paying Corporation Tax.
File your Company Tax Return (CT600)
How to file your Company Tax Return (CT600) including deadlines, payment requirements, iXBRL tagging, and quarterly instalment rules …
Corporation tax loss relief
How to use trading losses to reduce your company's corporation tax bill. Covers carry-back, carry-forward, group relief, terminal …
Corporation tax rates and small profits relief
Understanding the Corporation Tax rate structure following Finance Act 2022 changes. Covers the 25% main rate, 19% small …
Understanding HMRC enquiries
What happens during an HMRC enquiry and how to respond. Covers types of enquiries, time limits, discovery assessments, …
Register for Self Assessment
When and how to register for Self Assessment tax.
How taxes work for limited companies
Understanding Corporation Tax, VAT, PAYE, and Self Assessment - how they interconnect and your obligations to Companies House …
Digital Services Tax (DST) Compliance
Guide to Digital Services Tax for large digital platforms. Understand the 2% tax rate, revenue thresholds, registration process, …
Associated companies and Corporation Tax
How associated companies rules affect your Corporation Tax rate thresholds and quarterly instalment obligations.
Avoid Self Assessment penalties
Complete guide to Self Assessment penalties - how late filing charges escalate from a £100 fixed penalty to …
Plan your Corporation Tax payments
How to pay Corporation Tax on time, including quarterly instalments for large companies and Time to Pay arrangements.
Register your company for Corporation Tax
Step-by-step Corporation Tax registration for new companies.
Handle an HMRC Self Assessment enquiry
What happens when HMRC opens an enquiry into your Self Assessment return, what triggers one, your rights, how …
Sections and provisions
500 classified provisions from this legislation.
Duties 19
- s.5 Basic rule: sterling to be used for an accounting period
- s.1037 Requirement as to reduction of seller's interest as shareholder
- s.1045 Advance clearance: supplementary
- s.1082 Conditions for distributions within section 1076(a)
- s.1095 Exempt distributions: returns
- s.1104 Company distributing dividend or interest: duty to provide tax certificates
- s.228 Conditions to be met in relation to shares
- s.232 Investor must have beneficial ownership
- s.233 Investor must not be accredited
- s.234 No acquisition of share in partnership
- s.255 Manner of withdrawal or reduction of CITR
- s.269ZT Group allowance allocation statement: submission
- s.269DG Group allowance allocation statement: submission
- s.464ZB Section 464ZA : supplementary
- s.516 Rules for attributing excess expenditure to earlier periods
- s.578 Automatic termination for breach of certain conditions in section 528
- s.645 Tests to be satisfied by the association
- s.655 Claims under section 651 or 652
- s.978 Time limit for giving notice
Powers 16
- s.1011 Meaning of “associated company” in section 1009
- s.1091 Advance clearance of distributions
- s.1133 Regulations about the meaning of “offshore installation”
- s.1179 Power to undo changes
- s.161 Meaning of “restricted right to dividends”
- s.356F Transfer of allowances between sites
- s.356JL Use of allowance attributable to unlicensed area
- s.357BB Rights to which this Part applies
- s.357A Election for special treatment of profits from patents etc
- s.357X Introduction
- s.357D Alternative method of calculating relevant IP profits: “streaming”
- s.465 Power to obtain information
- s.470 Meaning of “research and development” in section 469
- s.543 Profit: financing-cost ratio
- s.625 Regulations: supplementary
- s.856 Position where lease may be ended
Definitions 138
- s.4 Amount of profits to which corporation tax rates applied
- s.9C Chargeable gains and losses of companies allowable expenditure
- s.16 Sections 13(2) and 15(5): profit against which carried-forward amount to be set off
- s.17 Interpretation of Chapter carried-back amount carried-forward amount investment company
- s.18N Close investment-holding companies qualifying company relative control
- s.18K Power to obtain information loan creditor
- s.57 Meaning of “contribution to the firm”
- s.58 Meaning of “limited partner” limited partner
- s.85 The unquoted status requirement debenture unquoted company
- s.100 Meaning of “trading loss” trading loss
- s.1017 Section 1015: other interpretation
- s.1028 Certain payments connected with exempt distributions chargeable payment exempt distribution
- s.1041 Section 1040: effect of entitlement to profits the new entitlement the old entitlement
- s.1051 “Bonus share capital” and “in lieu of a cash dividend” bonus share capital
- s.1062 Connected persons
- s.1063 Section 1062: supplementary
- s.1073 Key terms etc
- s.1089 Meaning of “chargeable payment”: unquoted companies
- s.1113 “In respect of shares” 90% group
- s.1119 The definitions accounting date basic rate body of persons
- ... and 118 more definitions
Exemptions 61
- s.44 Trade must be commercial or carried on for statutory functions
- s.68 Share loss relief
- s.1021 Section 1020: exceptions
- s.1023 Exceptions to section 1022(3)
- s.1044 Advance clearance of payments by Commissioners
- s.1047 Meaning of “group” and “51% subsidiary” in sections 1033 to 1047
- s.1056 Dividend or bonus relating to transactions
- s.1066 Exception for certain transfers between UK resident companies
- s.1084 Cases where condition K does not apply
- s.1096 Chargeable payments etc: returns
- s.1101 Other distributions etc: returns and information
- s.174A Certain option arrangements not within section 173
- s.202C “Inflated member-related expenditure”
- s.217A Relief for expenditure on grassroots sport
- s.269ZSA Group allowance nomination: former groups
- s.269ZY Meaning of “relevant reversal credit”
- s.286 Restriction on debits to be brought into account
- s.301 Effect of repayment of PRT: special rule
- s.332HB Carry-forward of unactivated allowance from a reference period
- s.356JHB Carrying forward of unactivated allowance
- ... and 41 more exemptions