This tax is charged on the profits of companies and unincorporated bodies (such as clubs). Profits include all sources of income and also Capital Gains but exclude dividends from U.K. companies.

Under the current 'Pay and File' system for Corporation Tax, companies have to estimate and pay their Corporation Tax no later than 9 months after the end of the accounting period, and file a statutory return with supporting accounts and computations within 12 months after the end of the accounting period. Interest is payable on unpaid tax from the 9 months date (and overpayments attract interest from the payment date). Automatic penalties apply if returns are filed late (although by concession a penalty will not be charged if the return is received on or before the last business day within seven days after the due date).

Under Pay and File, the provisions for making various claims, and for amending claims that have been made, are formalised and most claims will be incorporated in the statutory return or in an amended return.