Millhouses Accountancy
Corporation Tax is a tax paid by businesses in the UK and is calculated on annual profits in a similar way to how income tax is calculated for individuals, however, companies don’t get an equivalent personal allowance – all profits are taxable – however, there are some expenses and deductions that can be claimed to reduce the bill. Since April 2016, the rate of
Once a year, a company tax return must be submitted – form CT600 – and this tax is payable by:
Sole traders and partnerships, however, instead pay income tax on profits via self-assessment
You must register with HMRC to tell them about incorporating your company within three months of starting trading. They’ll need the following bits of information:
HMRC have an extensive explanation about how they define whether businesses are ‘active’, ‘trading’, ‘dormant’ or ‘non-trading’ so remember to check if you’re unsure
Corporation tax returns should be made after your companies year end and before your statutory filing date (The statutory filing date is either 12 months after the year end, or three months after your receive a notice to deliver a return from HMRC, whichever is latest). However, sometimes you may be required to pay your corporation tax before the return is due.
Up-to taxable profits of £1.5m, corporation tax should be paid within 9 months (and one day) after the end of your accounting year.
Businesses with a taxable income over £1.5m, corporation tax should be paid in instalments.
Your Corporation Tax bill should be paid by the deadline to avoid fines. Please also take into account bank holidays and weekends which may also reduce the amount of time you have to pay. As a rule-of-thumb:
Payments from personal credit cards are no longer accepted
HMRC may also carry our enforcement of debts and may also close down your business. The advice from HMRC is to contact them immediately if you’re unable to pay.
There are also potentially fines for inaccurate information
You should seek the advice of an experienced accountant to make sure your corporation tax bill is accurate and your neither paying too much or too little. Here are the main factors to take into consideration:
For more information, please get in touch with Millhouses Accountancy on Sheffield 0114 345 0960 or Nottingham 0115 882 0356