HMRC has been consulting on proposals to modernise the tax rules governing distributions and repayments of capital from companies. The consultation was published on 23 June 2026 and closed on 14 September 2026.
The proposals look at the treatment of ‘new consideration’ and ‘repayments of capital’,
A limited company usually pays Corporation Tax on the profit, known as a chargeable gain, when it sells or otherwise disposes of a business asset.
Business assets can include land and property, equipment & machinery and shares. The rules also apply to most unincorporated associations and
The rate of Corporation Tax payable depends mainly on the level of a company’s taxable profits. The main rate is 25% and applies where profits exceed £250,000. Companies with profits of £50,000 or less generally pay Corporation Tax at the small profits rate of 19%. But note, these two thresholds
A company does not have to be formally closed to become dormant for Corporation Tax. A company is usually considered dormant if it has stopped trading and has no other income, such as investment income.
A new limited company that has not yet started trading can also be dormant for Corporation Tax.
Companies and other organisations that are liable for Corporation Tax must ensure they register with HMRC at the correct time. Failing to register when required could result in missed filing obligations and potential penalties.
Most limited companies can register for Corporation Tax when they are
If your company makes a trading loss, it may be able to claim relief to reduce its Corporation Tax liability. Trading losses can often be used in different ways, depending on your company’s circumstances.
A company may be able to use a trading loss against profits from the same accounting period,
The term permanent establishment (PE) is an important tax concept for businesses that operate across international borders. In simple terms, it determines whether a business has created a sufficient presence in another country for its profits to be taxed there. The concept is used by HMRC to
Research and Development (R&D) tax relief is designed to support companies that invest in innovation and seek to make advances in science or technology. The scheme offers businesses the ability to invest in new technologies and scientific development in exchange for generous tax reliefs.
Many businesses take out “key person” insurance policies to protect against the financial impact of losing an important employee, director or other individual who is central to the success of the business. These policies may provide cover for death, critical illness, sickness, accident
Those responsible for the accounts and tax compliance of private limited companies must ensure they are fully aware of the relevant obligations and statutory deadlines.
Following the end of each financial year, a private limited company is required to prepare full annual accounts and submit a