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Corporation Tax Returns Managed by Certified UK Accountants
Frequently Asked Questions:
A company’s Corporation Tax return is due 12 months after the end of its accounting period. However, the tax itself must be paid within nine months and one day after the end of the accounting period. For example, if a company’s accounting period ends on 31 March, the Corporation Tax payment is due by 1 January of the following year.
As of April 2024, the main rate of Corporation Tax is capped at 25%. This rate applies to all companies with profits over £250,000. A small profits rate of 19% was also announced for companies with profits of £50,000 or less. Companies with profits between £50,000 and £250,000 will pay tax at the main rate, reduced by a marginal relief. This provides a gradual increase in the effective Corporation Tax rate.
Yes, companies can benefit from various reliefs and allowances, such as:
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Annual Investment Allowance (AIA): Allows businesses to deduct the full value of qualifying capital expenditure from their profits, up to a certain limit.
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Research and Development (R&D) Relief: Provides tax relief for companies engaged in qualifying R&D activities, potentially reducing their tax bill or offering payable credits.
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Loss Relief: Allows companies to offset trading losses against other income or carry them forward to future periods
Corporation Tax is calculated based on a company’s taxable profits, which include trading profits, investment income, and capital gains, minus allowable expenses and reliefs. Companies must prepare a Company Tax Return (CT600) to report these figures accurately.
Failure to pay Corporation Tax on time can result in interest charges on the outstanding amount and potential penalties. Persistent non-compliance may lead to enforcement actions by HM Revenue & Customs (HMRC), including debt collection procedures or legal action.
Corporation Tax is a tax imposed on the profits of UK-resident companies and on the profits of non-resident companies operating in the UK through permanent establishments. This includes limited companies, foreign companies with UK branches or offices, and other organizations like clubs or associations that generate taxable income.
