Before you can pay any Corporation Tax you owe, you will need to complete your Company Tax Return. CHW guides you through what you need to know.
Although the deadlines for paying your Corporation Tax and filing a Company Tax Return are different, in reality they are usually done at the same time.
The reason for this is that you need to complete your Company Tax Return in order to work out if there is any Corporation Tax due.
You can either get an accountant to prepare and file your Tax Return or do it yourself.
You need to file one of these if your company gets a ‘notice to deliver a Company Tax Return’ from HMRC.
Even if your company has made a loss or has no Corporation Tax to pay, you still need to file a return.
When you file your tax return, you will need to calculate your company’s profit or loss for Corporation Tax. This isn’t the same as the profit or loss shown in your annual accounts which is why most businesses get an accountant to prepare and file their tax returns.
You will also need to calculate your Corporation Tax bill.
If you have a limited company, you can file your accounts with Companies House and your company tax return with HMRC at the same time, provided your limited company doesn’t require an audit.
The deadline for filing your Company Tax Return is 12 months after the end of the accounting period it covers. Your accounting period is usually the same as the financial year covered by your company’s annual accounts although it can be different in some circumstances.
If you’re not sure when the end of your accounting period was, you can sign in to your online HMRC business tax account to check.
There’s a separate deadline to pay your Corporation Tax bill. It’s usually 9 months and one day after the end of the accounting period. This is if your taxable profits are up to £1.5m. If your taxable profits are in excess of £1.5m you must pay your Corporation Tax in instalments.
You’ll have to pay penalties if you do not file your Company Tax Return by the deadline.
If the Company Tax Return is 1 day late, the penalty is £100. A further penalty is payable if the return is 3 months overdue. If you file 6 months late, HMRC will estimate the Corporation Tax bill and add a further 10% of the unpaid tax as a penalty and after 12 months an additional 10% of unpaid tax is added.
If your tax return is late 3 times in a row, the £100 penalties are increased to £500 each.
You can pay:
If the deadline falls on a weekend or bank holiday, make sure your payment reaches HMRC on the last working day before it (unless you’re paying by Faster Payments) otherwise you will be liable to penalties and interest.
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