With corporation tax reliefs and rates changing on an annual basis, it’s important to make the most of all of the exemptions, allowances and deductions available for tax returns calculations.
What is a Corporation Tax Return?
All active companies must file a corporation tax return to HMRC each year to work out how much corporation tax is owed.
Your corporation tax will be based on the information in your statutory accounts, however, the profit you make is not necessarily directly linked to the amount of tax your company will pay as there are several reliefs, allowances and expenses you can claim to reduce the bill.
In addition to allowable expenses there is also an annual investment allowance of £200,000 for items such as computers and printers.
You can offset any of this spending against your tax bill. So if your profits were £100,000 one year but you spent £20,000 on equipment, you would only pay tax on £80,000.
You need to include all calculations for these expenses in your return. It can be complicated to work out the reliefs you are entitled to and to make sure you report the right information to HMRC.
Deadline to file your corporation tax return
Businesses typically need to file a corporation tax return 12 months after the end of their accounting period.
There is a single, fixed due date for payment of corporation tax, nine months and one day after the end of the accounting period (subject to the Quarterly Instalment
Payment regime for large companies).
If the payment is late or is not correct, there will be late payment interest on tax paid late and repayment interest on overpayments of tax. These interest payments are tax
How to file your corporation tax return
Companies must file their corporate return online. Their accounts and computations must also be filed in the correct format – inline eXtensible Business Reporting
Unincorporated organisations and charities that don’t need to prepare accounts under the Companies Act can choose to send their accounts in iXBRL or PDF format. However any computations must be sent in iXBRL format.
Penalties apply for late submission of the return of £100 if it is up to three months late and £200 if the return is over three months late. Additional tax geared penalties apply when the return is either six or twelve months late. These penalties are 10% of the outstanding tax due on those dates.
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