A quick guide on how to file a UK corporate tax return.
Here small guide for small businesses to make them through the corporate tax filing basics and procedures.
Let’s first know the basics of corporate tax returns.
What is a corporate tax return?
Corporate tax is a tax liability that a limited company must pay to HRMC on all its taxable income. A corporate tax return is also a CT600 Form where a company reports its expenses, profit, and corporate taxes to HRMC. Every limited company and non-profit organization must file corporate tax returns on its taxable income in all forms.
Unlike the self-assessment tax returns, there is no fixed deadline for filing a CT600. The due date for filing a corporate tax depends upon a company‘s accounting period.
Who is required to file a corporate tax return?
Limited companies must file corporate tax returns. To do this, one must register for corporate tax.
And, if you are a sole proprietor or partnership, then you need to file a self-assessment tax.
When any limited company is set up, they register with Companies House. Most companies also register for corporation tax and PAYE as an employer. The company’s registration is a must within 3 months of starting a business.
The companies or associations must file a company tax return upon receiving a ‘notice to deliver a Company tax return’ from HM Revenue and Customs (HRMC). Even if the companies make losses or don’t do anything, still require filing a company tax return.
The Filing Process
How to file a corporate tax return?
You can file a corporate tax return online. To start with, you will require.
- Companies’ taxable profit – which is the total profit of the company less tax allowance and expenses.
- User ID and password- Using first time, no user ID! You can create one when you use the first service.
- Companies House password and authentication code ( For accounts filing)
You can also file by using the paper CT600 form if you can’t file an online return. The HRMC provides a list of the reasonable excuses permissible. Along with the paper CT600 form, you must fill in and post Form WT 1 stating the reason for filing via paper mode.
When is the due date for filing a corporate tax return?
The due date is 12 months after the end of the accounting period.
The companies must file the company tax return within 12 months of the end of the accounting period it covers. Usually, the accounting period is the same as the company’s financial year.
However, the accounting period may cover more than 12 months in the first year of the operation of the company.
- The Companies House will fix a day for the end of your company’s financial year usually the last day of the month when the company was set up.
- As the accounting period covers more than 12 months, you may have to file two returns.
- The first account will run from the day your company started operating to the following year’s financial year-end.
And for future filings, the accounts of your company have their usual financial year, so require only a single return filing.
Still, confused about the financial year??? Get sorted with the following example:
Suppose you set up a limited company on 6 June 2021. The Companies House set the end of the financial year as on 30 June 2021.
The accounting period runs from 6 June 2021 to 30 June 2022 – a year and three weeks.
Thus, you will have to file two tax returns, one for three weeks and the other return covering one year. For the subsequent year, you will have to file a single tax return covering 1 July 2022 to June 30, 2023.
When the corporation tax bill is due?
The corporation tax bill is due after nine months and one day after the end of the accounting period. So you must ascertain the corporate tax three months before the filing of the tax return.
