Corporation Tax Return

The corporation tax return is a form which must be filed on an annual basis and submitted to HMRC. It takes its base information from the annual accounts, adjusts for any tax related rules and then calculates a taxable profit, which is usually different to the profit figure shown in the annual accounts.

Corporation Tax Return

What does the corporation tax return consist of?

The corporation tax return has different rules to the annual accounts when calculating profits.

Items such as parking fines and client dinners can not be used as tax deductible expenses in the corporation tax return. Income from investments must be separated from other income and so on.

Therefore it is important to separate these transactions at the bookkeeping stage to ensure that these dis-allowable expenses are not used in the tax return.

More importantly, certain tax allowances are claimed in the tax return, not in the annual accounts, so it is important to have knowledge of the allowances which will bring your tax liability down, such as the annual investment allowance.

Many directors think that the annual accounts and the corporation tax return are the same, when in fact they are very different. The annual accounts is submitted to companies house and follows financial reporting standards in its preparation, whereas the tax return is submitted to HMRC and use local tax rules during its preparation.

When is my deadline for filing my corporation tax returns?

The deadline for filing the company’s first tax return is usually 2 years from the date of incorporation.  

Thereafter it follows the period of your annual accounts. In the first year, you may need to submit 2 tax returns to bring your corporation tax periods in line with your annual accounts period.

When must I pay my tax?

If the company has made a profit, the corporation tax must be paid approximately 3 months before the tax return is due to HMRC.

HMRC normally send a payment slip in the post for you to enter the amount and make payment.

What happens if I file late?

Missing your filing deadline incurs the following penalties:

1 Day Late                  £100

3 Months Late          Additional £100

6 Months Late          Additional 10% of unpaid tax

12 Months Late         Additional 10% of unpaid tax

Tax Return Due Soon?

We can file Returns within 5 working days.
Call us on 020 7515 5883 to discuss

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