Corporation Tax Returns and Corporation Tax

The corporation tax is what limited companies need to pay tax to the HMRC (HM Revenue & Customs). This tax is paid on the company's trading profits and the capital gains from increased value assets sold, e.g. property and company shares. The rate depends on how much taxable profit the company makes in the accounting period, whether small businesses or large companies. Based on that, the company pays the bill. UK companies must pay it on all the taxable income they earn from the UK and foreign companies.

The rate increased from 1 April 2023. For small companies with profits of less than £50,000, the rate is 19%. For businesses whose taxable profits exceed £250,000, the rate will increase to 25%. For companies in between there will be a sliding scale of rates.

Companies with taxable profits between £50,000 and £250,000 will pay tax at the 25% rate, but this will be reduced by a marginal relief meaning Corporation Tax rates of between 19% and 25%. It may change from time to time. So always ensure that you pay the correct basic rate in your company's accounting period before nine months. For any tax changes, you can follow the gov site.

If you set up a limited company, it should be registered for this tax within three months of its starting. When your company starts business activity from that date, the company trading profits are calculated for corporation tax to pay. You must register with HMRC and fill an online form available on the UK gov site. If the registration process is late, you will end up paying the penalty.

If your company's taxable profit is £1.5m or less, the corporate tax return filing due date is nine months and one day after the end of the previous financial year. If the profits arising or the profits earned by the company are more than this, the tax payment you will pay in instalments.

There are ways in which you can reduce your bill by allowances and reliefs.

• Corporation tax allowance:You can have some allowance while calculating how much you need to pay. The cost of business purposes can be deducted from company profits while managing the annual accounts. The accommodation and training come under allowable expenses, and entertaining clients' costs don't come under allowable expenses.
• Corporation tax reliefs: A few reliefs are also available to minimise the tax bill: Research and Development (R&D) relief, the Patent Box, Creative industry tax reliefs, disincorporation relief, terminal, capital and property income losses, trading losses, marginal relief, relief of goodwill, and relevant assets.

If you are late three times in a row, the £100 penalties are increased to £500 each. If you are still six months late, HMRC will write to you about the corporation tax payment they think you must pay, which is a tax determination. It's better to arrange payment reminders to avoid paying additional taxes.

Yes, If your Company makes a loss or has no corporation tax to pay, you still need to file Company tax returns to HMRC.

The below information needs to be included in your company tax return:

• Company accounts for the financial year
• CT600 form
• The company computations
• Any supplementary documents

If you operate a limited company, a company tax return needs to be submitted to pay corporation tax. HMRC will calculate the tax you owe based on the given information.

UK-based companies are liable to pay corporation tax on the profits they make. Companies whose offices are not based in the UK and have a branch here only need to pay this tax on profits from their UK activities. If your UK-based company is paying tax overseas that can be deducted from your UK tax.

You can fill CT600 form online with all the account details and other required information for the Company Tax Return.