Do I need to file a Company Tax Return?
If your company is trading, you must register for Corporation Tax and file a Company Tax Return with HMRC each year, even if the company makes a loss or has no tax to pay. The deadline for filing the return is 12 months after the end of your company’s accounting period for Corporation Tax.
In this post, we will explain what information a Company Tax Return includes, how and when to file it with HMRC, and the potential penalties you could face if you file your tax return late.
What is a Company Tax Return?
A Company Tax Return is a compilation of financial documents that report income and expenses, profit or loss for Corporation Tax purposes, Corporation Tax liability, and other pertinent financial information to HMRC – the UK’s tax authority. To prepare a Company Tax Return, you must include:
- A properly completed form CT600 and any relevant supplementary pages.
- Full annual accounts, including the directors’ and auditor’s reports.
- Computations showing how the entries in form CT600 and supplementary pages were derived from the figures in the annual accounts.
- Any additional information relevant to the company’s tax liability.
By law, you need to submit this financial documentation to HMRC if you receive a ‘Notice to Deliver a Company Tax Return’.
Only companies need to file Company Tax Returns. If you are self-employed and run your business as a sole trader or through a partnership, you must file annual Self Assessment tax returns instead.
HMRC’s Company Tax Return Guidance offers detailed information to help you complete your Company Tax Return. However, the process can be complex, so you may want to consult an accountant or professional tax adviser if you have any uncertainties.
Do I need to register my company for Corporation Tax?
You will need to register your company for Corporation Tax online when you begin conducting business. ‘Doing business’ includes:
- carrying on a trade or professional activity
- buying/selling goods or services with the intention of making a profit
- employing people
- advertising
- renting a property for commercial purposes
- managing investments
- earning interest
When any of these activities take place, your company is considered ‘active’ for Corporation Tax purposes and must legally register within three months.
You will work out how much (if any) Corporation Tax your company owes when you complete a Company Tax Return. The deadline for paying your tax bill is 9 months and 1 day after the end of your Corporation Tax accounting period.
How and when to file a Company Tax Return
Unless your company is exempt from online filing, you must submit your Company Tax Returns electronically. You can do this using either HMRC’s Corporation Tax online filing service, or proprietary third-party software provided by a commercial company.
When preparing your tax return, you will use the information in your annual accounts to determine your company’s:
- Profit or loss for Corporation Tax purposes
- Corporation Tax bill
You can either appoint an accountant to prepare and submit your Company Tax Return or do it yourself if you feel confident.
Startxpress can also help you to file your Company Tax Return.
Typically, your Company Tax Return must be submitted no later than 12 months after the end of your Corporation Tax accounting period. HMRC will send a ‘Notice to Deliver a Company Tax Return’ to your registered office address, which will include your filing deadline.
Your accounting period for Corporation Tax
Your Corporation Tax accounting period is the time frame covered by your tax return, typically 12 months long and aligned with your company’s financial year in the annual accounts.
While your accounting period can be shorter than 12 months, it cannot exceed this duration. However, in your first year of business, your annual accounts might cover a period longer than 12 months.
In such cases, you will need to file two Company Tax Returns: one for the first 12 months and another for the remaining period covered by the annual accounts.
Penalties for filing your Company Tax Return late
If your tax return is delivered late, HMRC can impose significant financial penalties:
- 1 day late – £100 automatic fine
- 3 months late – An additional £100 fine
- 6 months late – 10% of your outstanding tax bill
- 12 months late – An additional 10% of your outstanding tax bill
If you file your tax return late for three consecutive years, the £100 penalties will automatically increase to £500 each.
HMRC can also impose penalties if your Company Tax Return is inaccurate. Additionally, if you provide false information or conceal any profits or tax liability, your company and its directors could face prosecution.
Do you have any other questions?
Do you have any other questions?
Filing a Company Tax Return is mandatory if your company is trading, even if it makes no profit. You must register for Corporation Tax and submit your return annually. Missing deadlines could result in significant penalties, including fines that increase over time.
For more detailed guidance on how and when to file your Company Tax Return, visit the Startxpress Help Center and Blog. If you need further assistance, feel free to email us at support@startxpress.io. We’re here to help you through the process!
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