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 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.

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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.  

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