The taxation on a limited company's profits is called Corporation Tax. The rates at which these are taxed depend upon the level of profits:

Main rate 28%
Profits above £1.5million

Small companies rate 21%
Profits between £0 to £300,000

Small/large marginal band £300,000 to £1.5million
Fraction (effective rate) 1/40 (29.75%)

Corporation tax is charged on the trading profits after adjustments for non tax deductible expenses (for example, depreciation) and capital allowances (an allowance based on capital expenditure incurred during the year).

The tax is payable within 9 months and 1 day after the end of the accounting period for small and medium companies. Large companies pay corporation tax by instalments.

All companies must file a corporation tax return together with corporation tax computations and accounts within 12 months of the year end.

There are financial penalties for the late payment of corporation tax and submission of the corporation tax return.