If you’re a limited company, you’ll need to file a corporation tax return. There’s quite a lot you need to consider and work out prior to paying your bill and it’s important that you pay it on time to avoid the penalties that come from paying corporation tax late.
Whether you’ve just set up your own business or are just trying to navigate the world of tax, we understand that it can all be a little confusing. That’s why we’ve put together this guide to tell you everything you need to know about filing your corporation tax return, so you can be as prepared as possible.
Who needs to file a corporation tax return?
You’ll need to file a corporation tax return if you fall into any of the following categories:
- Your business is a limited company
- You have a foreign company with a UK branch or office (if your company isn’t based in the UK, you’ll only need to pay corporation tax on profits from any UK activities)
- You have a club, co-operative or other unincorporated association
You’ll need to pay tax on any taxable profits including any trading profits, investments or chargeable gains.
What do I need to complete a corporation tax return?
To file your corporation tax return, you need to do it online with HMRC. Statutory accounts, profit and loss accounts, balance sheets, notes, a director’s report and your corporation tax calculations (this is different from the profit or loss shown in your annual accounts), will need to be sent alongside it.
At this point, your accounts will also need to be filed with Companies House which can be either done online or via post. Alternatively, to save you time there’s also an option to file it jointly via the HMRC website.
What is the corporation tax rate?
The current corporation tax rate for company profits is 19%.
When do I need to file a corporation tax return?
When you start a new company, you’ll need to tell HMRC within 3 months of beginning trading. Once you tell them this, they’ll let you know when you need to prepare your company accounts. HMRC will issue you a ‘notice to deliver a Company Tax Return’, which you’ll receive soon after the end of your company’s accounting period. You’ll then have 12 months after the accounting period ends to submit your corporation tax return and payment must be sent electronically by nine months and a day after the end of this period.
It’s important to note that you still need to complete a corporation tax return even if you make a loss or have no corporation tax to pay.
Penalties for paying corporation tax late
Of course, if you end up paying corporation tax late, there will be financial penalties that will need to be paid. As it stands the current penalties are as follows:
- one day late: £100
- three months late: another £100
- six months late: HMRC will estimate your corporation tax bill and then add 10% as a penalty
- 12 months late: another 10% of the tax liability
How we can help
At SixtyFour8, we know that filing your corporation tax return can be a tricky matter and it needs to be done quickly and efficiently in order to avoid any late fees or fines. Not to mention, there’s many more important things to be done in the day that doesn’t involve battling the books, like running your own business for one! But don’t worry, our team of dedicated and experienced personal accountants can communicate with HMRC on your behalf and take the stress out of your finances.
Call us on 01633 288 299 or get in touch today for a personalised quote.
Looking for more valuable accounting help for your business? Read our guide on essential accounting advice for small businesses, next.