Notice to deliver a company tax return Accountants 

 Company tax return defined

A tax return for a company can also be referred to as the CT600 form. This form is filed by companies and associations to report their expenditure, income, and the tax figures due to the HMRC. Companies are required to file their tax returns annually. However, there doesn’t exist any universal deadline for company tax returns like there exists for self-assessment tax returns for individuals. The reason for this is because companies have different accounting periods and therefore the filing of returns is done at the end of a company’s internal accounting period.

Find out more

 

Subscribe to our channel now for the latest updates 

Subscribe Now

 

Who needs to file a company tax return?

Anyone who runs a limited company must file for company tax returns at the end of the companies’ financial year. To enable the filing of these returns, one must first register with the HMRC. For sole traders and partnerships, all you need is to register for self-assessment tax. On the other hand, upon setting up a limited company, you must register with the company’s house for you to be able to start filing the returns. It is also at this stage where you will have to register your company for corporation tax and Pay as you Earn(PAYE) tax since your company will have employees who will be liable for PAYE tax. If you register your company through post through the use of third-party software or agent, the requirement is for you to register for corporation tax as a separate thing. Also, you should ensure that you have done the registration within 3 months after you have started doing business. This is determined by the selling, buying, advertising, renting premises, and having an employee. Once the HMRC does an assessment and determines that you are liable for corporation tax, it will send you a notice for the filing of a company tax return. Upon the receipt of this notice, you must send a company tax return regardless of whether you made a profit or a loss. Also, if you do not receive this notice and you are aware that you owe tax, you are expected to reach out to HMRC for tax assessment. Failure to contact HMRC will make you liable for prosecution for failure to declare tax.

How to file a company tax return?

Many people prefer to file their taxes online. To start, you need to have computed your companies’ taxable profits for the period. The taxable profits are computed by deducting tax allowances and business expenses from the total company’s income for the period you are reviewing. When making the company’s first return, you should create a new user ID on the HMRC website and proceed with the prompts. Paper CT600 form is only applicable to Welsh people and for those who have not been able to file their returns online. Also, the HRMC has written down a list of excuses that are reasonable for one to use this form. Once you choose to use this form, you must fill WT1 form which explains why you have chosen to use this form.

When to file a company tax return?

You need to file a return exactly 12 months after the end of your accounting period. In most instances, the company tax period is the same as the company’s financial year. However, in the first year of operations, the financial year may cover slightly more than 12 months and this is allowable. Most companies set up their financial year based on the month in which they were formed. In this instance, your financial year will run from the last day of the month in which the company was formed to the following year were 12 months’ end. If the accounting period covers more than 12 months you will be required to file 2 returns.

Cost of a Company tax return

The cost can vary depending on your activity. If your revenue is below the (85k) vat threshold you can expect to pay between £650 to £840 plus vat. This will include the yearly bookkeeping, Statutory accounts and the CT600. To produce the CT600, you will need to first complete the bookkeeping , accounts and then the CT600.

GM Professional Accountants Specialise is Corporation tax returns, we have offices located in London, Manchester and Birmingham.  

VAT Tax on Dropshipping from China to UK 

What Is Dropshipping?

Dropshipping is a very popular way of running a business if you do not have much capital for startup. By running a dropshipping business you do not have to pay for any stock upfront and you do not have to have large premises to hold the stock.

Find out more

How Does It Work?

You advertise a product for sale on your website and once someone buys it from you – you head over to the dropshipping wholesale website to purchase it. This third party receives the payment from you and they directly send the item to your customer. In order to profit from dropshipping you need to ensure you factor in the price of postage you will be charged and any vat or taxation.

Subscribe to our channel for the latest updates.

Where are The Dropshipping Companies Located?

There are many companies that specialise in dropshipping and these are all over the world. You can purchased an item in the same country as you want the item shipping to a customer, or you can buy from a foreign country and have the item imported to your customer.

However, bear in mind that if you choose a dropshipping company in the UK there may be vat to pay. Whether there is vat to pay and also the rate of vat to be paid can vary. In fact, vat may also change once Brexit has been completed, although currently the UK is still trying to thrash out an exit deal with the other EU countries.

Import And Export Duty

If you are dropshipping an item from another country, such as China, into the UK those goods may be subject to import tax. Again, not all goods are subject to import taxation. Usually, if there is import tax on an item it is paid by the customer receiving the item, although you can register your business as the importer. If you do this you will be liable for the vat but it can be claimed back at the end of the tax year when you complete your accounts. This is the preferred option as you can be sure your customers are not going to complain at having to pay an extra charge to have the item delivered. You just need to be sure that the price you charge your customer covers all your costs and adds a bit of profit for you.

 

Customs and excise require a label to be added to the outside of a package with a description of what is inside and the price. This determines whether duty is payable and how much.

Importing Goods From The EU To The UK

All countries have different rates of tax and import duty. Therefore, you will need to educate yourself on the differences before selling to customers otherwise you may find yourself out of pocket.

What If No-one Pays The Import Tax?

If a product is subject to import duty then it will be stored until such time as the tax has been paid, whether that is by the customer or the business selling the item.

Dropshipping from China to the UK

Basic principle

Section 7(6) applies to goods whose supply involves their being imported into the UK from somewhere outside the EU. Effectively the place of supply is determined by who acts as the importer. So if the supplier imports the goods into the UK, the supply to the UK customer is treated as taking place in the UK and so the supplier may be liable to register for VAT here.

However, if the UK customer imports the goods, the supply is treated under section 7(7)(b)as taking place outside the UK.

Chain supplies

Goods imported from a third country may involve a chain of supplies. For example

• A may supply the goods to B
• B then supplies them to C, and
• C in turn supplies them to D.

At some stage the goods are imported into the UK and so the place of each supply will depend on who acted as the importer.

Good Customer Relations

It is important that you make it clear to your customer whether there is any import duty to pay, otherwise your business may suffer.