Company Tax Return

Each year, HMRC requires private limited companies to file an annual tax return.

You can file an online tax return using Form CT600, and it should include your full statutory accounts. You will also be liable for paying any tax due to HMRC at this time.

What is a company tax return?

HMRC requires you to pay corporation tax on your taxable income, which includes money generated from the sale of goods and/or services, bank account interest, income generated from renting property, salary and dividend payouts, and any other form of taxable income.

If you are a company director or shareholder, you should ensure your business is registered as “active” at Companies House within three months of formation for corporation tax purposes. You should also ensure your corporation tax return is filed correctly and on time so that you avoid penalties. Working with an accountant who can advise you of when and how to file a tax return correctly can save you a great deal of time and hassle.

Company tax rates

As of April 1st 2015, the rate of tax for company profits is 20%.

If your accounting period covers two financial years in which two different tax return rates were applicable, you will need to file two separate returns to ensure the right amount of corporation tax is paid.

How to file a tax return

You will need to file your corporate tax return online through the HMRC website.

Many limited company directors choose to let accountants do this on their behalf. You will need to provide all relevant documentation so that they can prepare the accounts, and then they will submit the completed CT600 form online. You cannot file your tax return via post.

When to file a tax return

You will need to file a company tax return at the close of your company’s accounting period.

As companies incorporate at different times of the year, there is no universally set corporate tax return deadline. Instead, you must pay your tax return within nine months and 1 day after the date your company’s corporation tax accounting period has ended. For this reason, your accounting period may be shorter than 12 months, however, it must never be longer.

If corporate tax returns are just one day late, your will incur a penalty of £100. Above this, HMRC can levy fines that can equate to up to 20% of the amount of unpaid tax.

In order to ensure your company’s corporate tax returns are filed correctly and on time, you may wish to enlist a professional accountant to help you.