1. What is corporation tax?
Corporation tax is a tax payable by UK resident company. The company is
required to complete self-assess its profits or losses under the corporation
tax sell-assessment regime (CTSA) regime. When your company is register
with Companies House, your company will get a unique tax reference number called corporation tax reference number. As a director of your own
company, you are required to contact HM Revenue & Customs (HMRC) within three months of starting to trade to let them know the company is trading.
2. How do I file my company’s corporation tax return?
HMRC requires companies to file online. When your company file its corporation tax return
online, your company is also required to file supporting computation and statutory accounts
prepared using special software.
3. When to file corporation tax return?
Your company must complete a UK corporation tax return for each accounting period. You
company must submit its corporation tax return within 12 months of the end of the accounting
period.
4. How will I know if HMRC is happy with my company corporation tax return?
Provided that your company files its corporation return on time, HMRC has up to 12 months to
inquire into the return. If you don’t hear from them within this period, you can assume they
are satisfied with your company’s corporation tax return.
5. What happens if my company is not making a profit?
If your company makes a loss for tax purposes in an accounting period, your company’s trading
losses are automatically carried forward and set against future profits of the same trade. This
has the effect of reducing your company’s future corporation tax liabilities. If your company is
doing work that qualifies as R&D, your company can opt to surrender these losses and take a
cash tax credit instead.
6. When is corporation tax due?
Corporation tax is generally due nine months and one day after the end of the accounting
period it relates to. Interest on underpayments or late payments of corporation tax is added
from the due date for payment to the actual date of payment. If you file your company’s
corporation tax return and supporting documentation after the 12-month deadline, your
company gets a late filing penalty of £100. There are more penalties if your company corporation tax return is three months, six months or twelve months late.
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