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Company Tax Returns and Corporation Tax

Limited companies in the UK pay corporation tax to HMRC on their profits. Dealing with tax issues is one of the most crucial tasks for an accountant. If you are a newly set up limited company owner, we can assist you with complying with the rules, including understanding corporate tax rates.

dns accountants corporation tax experts spend time with you, take adequate steps to reduce your tax liability, and pave the way for business growth and development.

Who needs to pay Corporation Tax

Who needs to pay Corporation Tax?

Corporation tax is paid to the UK government by all UK limited companies and foreign companies that have UK offices. Apart from this, the trade association, housing associations, societies and member clubs also pay it to the government. The submission and completion of returns totally depend on the company's director. They also have the choice to get help from experts.


How to pay the company's Corporation Tax bill?

You need to follow these steps to pay your corporation tax:

  • First, register with Companies House.
  • Prepare all the related documents and file company tax returns. You can also get help from accounting experts.
  • Pay your tax with the methods given below. There are a few different ways you can pay to HMRC:
    • Payment through your online bank account - same day or the next day
    • Online or telephone banking or CHAPS- same day or next day
    • Online by debit or corporate credit card- same day or next day
    • Direct Debit - 3 working days
    • Online or telephone banking by Bacs- 3 working days
    • Bank or building society- 3 working days
    • Direct Debit-5 working days

On weekends or bank holidays, plan it as early as possible to avoid crossing deadlines.

How to pay the company's Corporation Tax bill

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When do I need to submit my Company Tax Return

When do I need to submit my Company Tax Return?

In case your accounts cover a period of fewer than 12 months, still it matches the corporation tax period, but if your accounts cover a period of more than 12 months, then there will be two accounting periods, and you have to file two company tax returns to HMRC –

  • First company tax return for 12 months
  • Second company tax return for the remaining period.

It may happen with many of the small businesses that they get confused while submitting Return when it is for a shorter period or a longer one but no need to worry as our expert tax accountants have specialisation in handling such cases and will calculate and file your return accurately and without any hassle.


Company Profits and Adjustments

In the case of Corporation Tax Return, you need to file tax on the profits you earned from doing business, investments and capital gains. Companies that are based in the UK need to pay on all its profits they earned from the UK and abroad.

Company tax return depends entirely on the profits and losses made by the Company. Still, these need to be adjusted before the tax filing deadline so that you don’t have to face any penalties going forward and everything will get sorted in good time. The Company tax return must include a calculation of tax disclosing the adjustment of profits in your financial accounts to work out the taxable profits.

Some businesses try to save their money on professional fees and ignore the assurance, skills and experience of an accountant but sometimes it may lead them into a big problem. Our experts at dns accountants check your filings with the help of efficient internal systems and HMRC Compliant software “Nomi”.

Company Profits and Adjustments

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What is a Corporation Tax Returns

What is a Corporation Tax Returns?

A Corporation Tax Return is a return filed by Companies or associations to declare their profits, spendings and company tax figures to HMRC, usually once a year. It is essential for all active UK companies to file their tax return before the deadline to meet their legal obligations and avoid late penalties. Company tax reliefs and rates are changed several times on an annual basis, therefore you need to make the most of the allowances, exemptions, and deductions to reduce your Corporation tax liability.


How to file a Company Tax Return?

A Company should never pay their corporation tax after the deadline and give an invitation to the penalties imposed by HMRC. It can only be possible if a company can know about every deadline concerning tax return. A Company usually needs to file a return 12 months after the completion of the accounting period. The deadline is usually 9 months and one day after the completion of the accounting period.

There is no bill provided by HMRC, and you need to work out, pay and report your tax to HMRC on your own. Our experts at dns accountants not only calculate your tax but also pay and report the same to HMRC much before the deadline to ensure that there will be no penalties and you remain compliant by fulfilling all your legal obligations.

How to file a Company Tax Return?
What are Corporation Tax Late Filing Penalties

What are Corporation Tax Late Filing Penalties?

If you do not file your company tax return before the deadline, you will have to pay penalties to HMRC –

  • If you’re 1 day late - Penalty of £100 will be levied
  • If you’re 3 months late - Penalty of another £100 will be levied
  • If you’re 6 months late - Penalty of 10% on the unpaid tax after the estimation of the bill by HMRC.
  • If you’re 12 months late - Penalty of 10% of any unpaid tax.

Other than delay in filing, there are certainly more things which you need to take care of while filing to avoid penalties. Any wrong information on Company tax return may put you in a big problem which could lead to even high penalties. Our expert tax accountants can also help you in amending the return if you have already missed the deadline.


Our corporation tax services include

Corporate tax
Preparation of Corporation tax return
Calculation of Corporation tax liability
Submission of Corporation tax return
Making the most of tax allowances and reliefs
Reviewing of Company taxation affairs & position
Tax Compliance and
Correspondence with HMRC

See how dns can help you today.

Are you a limited company owner? Get help with company tax returns with our experienced & dedicated accountants. Call us today at 03300 886 686 to speak to our advisors, and we'll find the right solution to all your corporation tax needs.

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Frequently asked questions for 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 corporation tax deadline 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.

If a company profits less than £50,000, the corporation rate is 19%. For businesses whose taxable profits exceed £250,000, the rate will increase to 25%. Companies with taxable profits between £50,000 and £250,000 will pay tax at the 25% rate, but you might be able to get Marginal Relief if the company's annual taxable profits are between £50,000 and £250,000.

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