What taxes does a limited company have to pay?
Last updated · General guidance, not legal or tax advice
A UK limited company pays Corporation Tax on its taxable profits. Depending on its circumstances it may also need to charge and pay VAT, and operate PAYE to deduct Income Tax and National Insurance from salaries, paying employer's National Insurance where it is due.
Directors and shareholders can also owe personal tax on money they take from the company, such as salary or dividends. Rates and thresholds change, so always check the current figures on GOV.UK.
Corporation Tax
Corporation Tax is charged on a company's taxable profits — broadly its income minus allowable expenses and reliefs. A company must register for Corporation Tax once it starts doing business, file a Company Tax Return every year and pay the tax by the deadline. Rates depend on profit levels and can change, so see the current Corporation Tax rates.
VAT
A company must register for VAT if its VAT-taxable turnover goes over the registration threshold, and can register voluntarily below it. Once registered it charges VAT on taxable sales, can usually reclaim VAT on business purchases, and files VAT returns. See when to register for VAT.
PAYE and National Insurance
If the company pays employees — including directors — through payroll, it usually needs to register as an employer and operate PAYE. It deducts Income Tax and employee National Insurance where due, may pay employer's National Insurance, and reports to HMRC each time it pays people. See does a director need payroll?.
Other taxes that may apply
- Business rates if the company occupies non-domestic premises
- Stamp Duty Land Tax if it buys property
- Stamp Duty on some share purchases
- Benefit-in-kind charges (Class 1A National Insurance) on certain benefits such as company cars
- Sector-specific duties in some industries
Personal taxes for directors and shareholders
The company's taxes are separate from your own. You may pay:
- Income Tax and National Insurance on salary taken through payroll
- Dividend tax on dividends above any allowance — see GOV.UK: tax on dividends
- Tax on certain director's loans or benefits
Many directors need to file a Self Assessment tax return, for example if they receive dividends above certain levels. Whether you do depends on your own circumstances.
How companies typically stay on top of tax
| Tax | Who it's paid to | Typical frequency |
|---|---|---|
| Corporation Tax | HMRC | Annually, after the accounting period |
| VAT (if registered) | HMRC | Usually quarterly |
| PAYE / NIC (if running payroll) | HMRC | Monthly or quarterly, depending on the amount |
| Personal tax | HMRC, via Self Assessment where needed | Annually |
Good bookkeeping makes all of this easier — see what records to keep. For ongoing accounting support covering Corporation Tax, VAT and payroll, In Front Accounting can help.
In short
A UK limited company pays Corporation Tax on its taxable profits and must file a Company Tax Return each year. It must register for VAT if its VAT-taxable turnover goes over the threshold, and can register voluntarily below it. If it pays employees or directors through payroll, it usually operates PAYE, deducting Income Tax and National Insurance and paying employer's National Insurance where due. Other taxes, such as business rates or Stamp Duty, may apply in some situations. Directors and shareholders also pay personal tax on salary, dividends and some benefits, often through Self Assessment. Rates and thresholds change regularly, so check current GOV.UK figures or ask an accountant.
Frequently asked questions
Does a company pay tax if it makes a loss?
It does not pay Corporation Tax on a loss, but it must still file a Company Tax Return if HMRC has asked for one, and other taxes such as PAYE or VAT may still apply.
Is dividend income taxed?
Dividends can be taxed personally depending on the amount and your other income. Check GOV.UK for the current allowance and rates.
Sources and official guidance
- GOV.UK: Corporation Tax
- GOV.UK: Corporation Tax rates and reliefs
- GOV.UK: VAT registration
- GOV.UK: PAYE and payroll for employers
- GOV.UK: Tax on dividends
- GOV.UK: Self Assessment tax returns
This guide is general information about UK rules as at 3 October 2026. It is not legal, tax or financial advice.