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What information do I need to complete a Company Tax return?

When it comes to completing your Company Tax return, there’s a few things that small business owners need to know.

Who needs to complete a company tax return?

Corporation Tax needs to be paid by any company registered with Companies House, and does not need to be paid by self-employed people (who should pay submit their Self Assessment tax returns).

Any owner of a small registered company is going to need to ensure that a company tax return is completed. Of course, this may be a job which you choose to delegate to an employee or accountant; but you are ultimately responsible for ensuring that it is submitted on time and that the figures are correct.

Why does it need to be completed?

A company tax return needs to be completed in order to notify HMRC of any Corporation Tax owed.

When does it need to be completed by?

If your company receives a ‘notice to deliver company tax return’ letter from HMRC, then you need to start preparing to file your tax return.

The tax deadline date for submitting your return will be 12 months after the end of the accounting period the return is for. The accounting period will typically be the same as the financial year in your company accounts, but it may be different. For instance, in your first year of trading, you may need to send two tax returns. But don’t worry, HMRC will notify you; and you can always log on to your HMRC business tax account to check.

To make things easier, you will most likely be able to submit your return to HMRC at the same time as filing your accounts with Companies House. This applies to most small businesses, as most small businesses won’t need to be audited. Generally, HMRC only audit small businesses if it is specified in the company’s articles of association or if it is requested by shareholders.

What are the penalties for filing a late company tax return?

As with Self Assessment returns, there are fines for late submission of company tax returns.

How late?

Penalty

1 day

£100

3 months

An additional £100

6 months

 HMRC will estimate your Corporation Tax bill and add a penalty of 10% of the unpaid tax on to your amount due

12 months

A further 10% of any unpaid tax will be added to your amount due

 

Where can I find detailed help for filling out my company tax return?

The form that you will use to file your company tax return is called the CT600. Because filing the CT600 is more complex than completing a Self Assessment, HMRC have published a detailed CT600 Guide to help small business owners through the process.

The CT600 guide will include guidance on what information to include and also how to do some of the more complex accounting calculations such as for ascertaining your:

  • Turnover
  • Losses
  • Profits
  • Income
  • Chargeable gains
  • Tax deductions
  • Tax reliefs
  • Tax reductions
  • Tax reconciliation

The guide will also instruct you on how to present your accounts (they must be in Inline eXtensible Business Reporting Language, iXBRL, format).

If – after looking at the guide – you are still unsure about how to fill out the company tax return form, then it may be advisable to seek professional help from an accountant or tax advisor.

How do I pay my HMRC Corporation Tax bill?

While the tax deadline dates for filing your company tax return and paying your Corporation Tax bill are different, many small businesses choose to complete them at the same time.

Even though the deadline for paying your small business Corporation Tax isn’t until nine months and one day after the end of your accounting period, once you have completed your tax return and have confirmed the amount you owe to HMRC, it is possible and advisable to pay your Corporation Tax bill as soon as possible.

Your Corporation Tax bill can be paid online (via Bacs, Direct Debit, corporate business card) or even in person at your bank.

What are the penalties for paying Corporation Tax late?

The penalty for late payment of your Corporation Tax is a charge of daily interest on the amount owed. These fees begin the day after the deadline date to pay and will continue every day until the full amount is paid.

While this situation is not advisable, if you were to find yourself in this situation, it is important to know that the interest charged by HMRC for late payments can be put down as a business expense for that accounting period, meaning that it will at least be tax deductible.

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