What is Corporation Tax?
The tax a limited company pays on its profits.
A company pays Corporation Tax on its profits, separately from any tax you pay personally on what you take out of it. That two-layer structure is the main thing that makes company tax feel more complicated than being a sole trader.
The small profits rate is 19% on profits up to £50,000. The main rate is 25% on profits above £250,000. Between the two, Marginal Relief tapers the effective rate from one to the other.
It is paid before the Company Tax Return is due, which is the opposite way round to Self Assessment and catches out first-year directors.