UK HMRC issued guidance on Corporation Tax for selling business assets on 16 January 2025.
Corporation Tax is a tax that a company or association pays to HM Revenue and Customs (HMRC) on profits in an ‘accounting period’. The amount paid depends on how much profit is made. Certain entities may be able to get allowances and reliefs.
Entities must pay Corporation Tax on profits from doing business as a:
- limited company
- foreign company with a UK branch or office (also known as an “overseas company”)
- club, co-operative or other unincorporated association, for example a community group or sports club
Entities do not get a bill for Corporation Tax. There are specific things they must do to work out, pay and report your tax.
Profits entities pay corporation tax on
Taxable profits for Corporation Tax include the money companies or associations made from:
- doing business (‘trading profits’)
- investments
- selling assets for more than they cost (‘chargeable gains’)
If the company is classed as a UK resident for tax purposes, it pays Corporation Tax on all its profits from the UK and abroad.
If the company is not classed as a UK resident for tax purposes but has an office or branch here, it only pays Corporation Tax on profits from its UK activities.
Manage corporation tax
Entities need to add Corporation Tax services to their business tax account to manage their Corporation Tax online.
If they are a club, cooperative or other unincorporated association, they need to register for Corporation Tax first.
