Corporation Tax Returns UK | How Yours is Calculated
Filing corporation tax returns in the UK is an essential responsibility for every limited company. Understanding how your company tax returns UK are calculated, meeting corporation tax deadlines and ensuring a smooth corporation tax submission can help you avoid penalties.
In this article, FHP Accounting explains the key steps, deadlines and benefits of using professional accountants to manage your corporation tax returns UK.
What Are Corporation Tax Returns?
A corporation tax return UK is a formal document submitted to HMRC that reports your company’s profits, allowable expenses and tax liability. Even if your business operates at a loss or generates minimal income, you are legally required to submit a corporation tax return each financial year. Some exemptions exist, but we’ll keep it simple.
Why it matters:
- Ensures your business remains compliant with HMRC regulations
- Confirms your taxable profits and corporation tax liability
- Avoids fines or penalties for late submission
At FHP Accountancy Services, we are recognised as one of the best tax return companies in the UK, helping businesses prepare accurate corporation tax submissions every year.
How Is Corporation Tax Calculated?
The corporation tax your company pays depends on its taxable profits. Here’s how it works:
- Start with accounting profit
- Derived from your company’s financial statements
- Adjust for tax purposes
- Add back non-deductible expenses (e.g., entertaining costs)
- Apply capital allowances on eligible assets
- Account for timing differences such as deferred tax
- Calculate taxable total profits
- This final figure is used by HMRC to determine your corporation tax liability
Example: If your accounting profit is £500,000 but includes £50,000 of non-deductible expenses, your taxable total profits would be £550,000. HMRC then applies the current corporation tax rate to calculate the amount payable.
What are the Corporation Tax Deadlines?
Being aware of corporation tax deadlines is crucial to avoid interest and penalties.
| Deadline | What It Covers |
|---|---|
| Corporation Tax Return (CT600) | Must be filed within 12 months of your accounting period end |
| Corporation Tax Payment | Typically due 9 months and 1 day after the accounting period ends |
| Penalties for late filing/payment | Can include fines, interest, and surcharges on unpaid tax |
If you look at the table, it seems strange that you pay your tax before filing your corporation tax return!
Here’s why: you usually pay an estimate first, because it may take time to process the full numbers. Once your CT600 is submitted, any underpayment or overpayment is adjusted.
A Little Corporation Tax Payment Hack for You
There’s a legitimate way to earn interest from HMRC by paying early. By paying your corporation tax 6 months and 13 days after the start of your accounting period (with the correct reference), HMRC will typically pay interest from the payment date up to the due date.
It can be worthwhile if HMRC’s credit/repayment rate (net of tax on the interest you receive) is higher than alternative short-term uses of the cash.
However: the interest is taxable, rates can change and cashflow implications should always be considered.
Benefits of Using a Professional Tax Return Company
Working with the best tax return company in the UK offers multiple advantages:
- Accurate preparation of corporation tax returns UK
- Timely corporation tax submission
- Guidance on maximising tax efficiency
- Peace of mind knowing corporation tax deadlines are met
Professional accountants also assist with complex areas such as investment property revaluations, capital allowances and group company filings.
How FHP Accountancy Services Can Help You
At FHP Accountancy Services, we specialise in managing company tax returns UK for businesses of all sizes. Our services include:
- Full preparation and filing of corporation tax returns
- Reconciliation of accounting profits to taxable profits
- Advice on tax planning and compliance
- Monitoring corporation tax deadlines to avoid penalties
By choosing FHP, you are working with a team recognised as one of the best tax return companies in the UK, committed to providing accurate, efficient and stress-free service.
Please contact the team today for help with your company tax returns, or any other questions you may have! We’re happy to help. To book an appointment with us, please follow the link here.
Frequently Asked Questions
Who needs to file a corporation tax return?
All UK limited companies, including dormant companies in some cases, must file a corporation tax return UK with HMRC.
Does MTD affect corporation tax?
Currently, Making Tax Digital (MTD) primarily affects income tax for business and property income. We monitor these changes closely to ensure all clients transition smoothly when MTD requirements are introduced.
Can I submit my corporation tax return myself?
Yes, you can submit your corporation tax return yourself directly to HMRC. Using a professional ensures your corporation tax submission is accurate, complete and optimised for any available allowances.
What happens if I miss a corporation tax deadline?
HMRC may impose penalties, interest on unpaid tax, or surcharges. Using a professional service helps prevent these issues.
