Corporation tax. Just saying it out loud is enough to make your coffee go cold. But don’t worry. If you’re running a business in the creative world, you don’t have to go it alone.
In fact, understanding corporation tax might be the ticket to feeling more confident about your numbers. And when you team up with the right people (spoiler: that’s us), you can even find ways to make the process feel a little less like paperwork purgatory and a little more like a step toward growing your dream.
Now let’s dive in and find out what this mysterious tax is all about.
What even is Corporation Tax? Corporation tax is the money your limited company pays to the government on its profits. That’s the cash left over after you’ve paid your staff, sorted your suppliers, covered your costs and probably bought a few plants for the office because you read they help with productivity. It’s a tax on profit, pure and simple.
In the UK, the rate can change depending on how much profit you make. It’s not a flat number for everyone. So if you’re just starting out and your profits are modest (read: you’ve spent more on coffee than your accountant), you might pay a smaller percentage than a business raking in the big bucks.
Who pays it and when? If you’re a limited company, you’re in the club. You’ll need to work out your profits for your financial year and then file your corporation tax return. This isn’t something you do with a wing and a prayer. HMRC is not known for its sense of humour. You’ll need to get your numbers right and file on time.
Most companies need to pay their corporation tax within nine months and one day after the end of their accounting period. That’s a bit of a mouthful but essentially means you’ve got some time to pull everything together and double-check you haven’t accidentally claimed your Netflix subscription as an office expense (no judgment).
Can you reduce what you owe? Here’s the juicy bit. Yes, you can reduce your bill. Legally. No loopholes. No dodgy dealings. Just smart accounting. This is where creative accountants shine. (First use!) We know how to make sure you claim every allowable expense, make the most of any available reliefs and avoid overpaying.
There are things like R&D tax credits for innovation, capital allowances for equipment and other clever options that can help bring your bill down. You just need someone who understands your business and actually enjoys digging into the details. Yes, those people exist. Again, spoiler: it’s us.
Why it matters to creatives If you’re in the creative space, you’re probably more about ideas and inspiration than balance sheets and deadlines. That’s exactly why working with creative industry accountants (First use!) can be a game changer. We speak your language and we understand how your business flows.
Whether you’re a designer, filmmaker, animator, writer or any other fabulous flavour of creative, your income might not follow a traditional pattern. You need someone who gets the ebb and flow, who knows how to set things up so you can plan ahead, and who won’t fall asleep halfway through your project pitch.
So, what should you do next? Don’t panic. Don’t close this tab and hope it all sorts itself out. The best thing to do is connect with someone who’s got your back and knows the rules of the game.
This is where creative accountants (Second use!) earn their stars. We’ll help you figure out what you owe, when to pay it and how to keep more money in your business doing the things you love. It doesn’t have to be scary. It can even be fun. Yes, we said it. Fun.
Check out our accountants for creatives page to see how we work our magic.
One last thing before you go If you’re nodding along, slightly terrified but also a bit excited that someone gets it, let’s chat. Whether you’re new to the game or just tired of feeling like you’re winging it, we’re here to help. Visit Raedan and let’s turn your tax talk into something a lot more empowering and a lot less snooze-worthy.
