UK Corporation Tax

Let Heron Accounting Services take care of your Corporation Tax  returns and computations, while you take care of your business!

If you run a limited company then you will have to complete a corporation tax return. There are significant penalties for the late filing of corporation tax returns and knowing the various rules can be tricky. Our BUSINESS TAXES services aims to ensure that you pay ONLY what you should and ONLY when you should. 

 

If you would like to take advantage of our BUSINESS TAXES services then

please contact us direct on 0844 736 6111 or email mail@has.co.uk

 

Corporation Tax - The Basics 

Accounting periods

Your business is self-assessed over accounting periods. For most businesses these are 12 months long and match the dates you have your accounts drawn up. It is possible to set accounting periods for less than 12 months, although not longer.

Payment of Corporation Tax itself is due 9 months and one day after the company's "normal due date" - usually the last day of your annual accounting period. 

What will you pay?

There are two rates of corporation tax depending on the level of profits you make. 

In the 2010/11 tax year, you will be charged 21 per cent on profits of up to £300,000. This is known as small companies’ rate. The main rate is 28 per cent on profits of £1.5 million and above. The small companies' rate will fall to 20% from April 2011,

For companies that make profits between £300,000 and £1.5 million there’s a scheme called marginal relief, to make it easier for them to move from one rate to the other.

Following the 2010 'Emergency Budget', the Government announced that the small companies' tax rate will drop to 20% from April 2011, and the main 28% corporation tax rate will drop by 1% each year from April 2011 until April 2014.

Deadlines and penalties

You can send your company tax return in any time after the end of your accounting period (your year end). You have to do it by the statutory filing date. This is usually the later of 12 months after the end of your accounting period, or three months after you get a notice to deliver a company tax return.

If you send the tax return in late your company will be charged a penalty. There may also be a penalty if the tax return is incorrect.

If you do owe any corporation tax, this is due nine months and one day after something called your normal due date. This is the last day of your accounting period. If that was 31st December, your tax payment will be due on 1st October. There may be a penalty and interest charges if you pay it late. 

Self-assess your business

Once a year you will get a notice from HMRC to file a company tax return. It is your responsibility to fill out the tax return even if the notice doesn’t reach you. This involves filling out a company tax return form CT600 plus sending off your accounts information.

HMRC is encouraging businesses to do this online as much as possible. As well as speeding up the process, the tax calculations are done by the website. Heron Accounting Services use special software to prepare company tax returns, and submit them online for you.  

Registration

To ensure avoidance of penalties, companies should notify HM Revenue & Customs within 3 months of commencing trading which is normally done by means of completing form CT41G.

Filing Dates of Returns

The corporation tax self-assessment return (CTSA) must be submitted to HMRC along with the accounts and tax computations, although it is possible to file all this information online through the HMRC website.  The filing deadline for the CTSA return (plus accounts and tax computations) is normally 12 months from the end of the accounting period.  If the return is late there are penalties as follows...

  • Up to 3 months late - £100 (increasing to £500 for a third consecutive late return)
  • Over 3 months late - £200 (increased to £1000 for a third consecutive late return)
  • 18 to 24 months late - Extra tax geared penalty of 10% of the unpaid tax
  • More than 24 months late - 20% of the unpaid tax.

Payment Dates For Corporation Tax

This is usually 9 months and 1 day after the end of the accounting period for small companies. However large companies (£1.5 million of profits) pay under 4 quarterly installments, that commence 6 months into the accounting period, so they must use an estimate of their eventual tax liability for the year.  Companies that form a group may fall into the definition of "large" and be required to pay corporation tax by installments.  Interest runs on late payment.

 
If you would like to take advantage of our BUSINESS TAXES services then

please contact us direct on 0844 736 6111 or email mail@has.co.uk