You should prepare for filing when you get a ‘notice to deliver a Company Tax Return’ from HM Revenue and Customs.
Getting the HMRC notice means your limited company, or unincorporated association, needs to file a Company Tax Return.
You must still file a tax return even if the business made a loss or there is no Corporation Tax to pay. The process involves working out your:
- Profit or loss for Corporation Tax (different to the profit or loss shown in the annual accounts)
- Corporation Tax bill
As a limited company, filing accounts and tax returns with Companies House together and at the same time may be an option for you.
You can prepare and file your tax return yourself or you can appoint someone to deal with HMRC on your behalf (e.g. an accountant or a tax agent).
Note: You will not need to send a Company Tax Return if you are working for yourself (e.g. a sole trader or in a business partnership). But, being self-employed means you must send in a Self Assessment return instead.
Company Tax Return Deadline
The accounting periods for Corporation Tax can vary (up to 12 months). But, they often run the same period as a financial year.
The tax return deadline is 12 months after the end of the accounting periods that it covers. Missing the payment deadline means you would have to pay a penalty to HM Revenue and Customs.
Note: A separate deadline applies when you pay your Corporation Tax bill. As a rule, it is nine (9) months and one (1) day after the end of the accounting period.
Filing Accounts and Company Tax Return
Your limited company, or unincorporated association, can use the government online tax service to file:
- Company Tax Return (CT600) for Corporation Tax with HMRC.
- Accounts to Companies House.
- Company Tax Return and accounts together at the same time (for the same accounting period).
You would need to prepare annual accounts for a private limited company in advance. The business account must be ‘balanced’, meaning that the total assets match what the company owes. Any unincorporated associations can upload a PDF version of the accounts.
You would need a ‘reasonable excuse’ (such as wanting to file in Welsh) to file a paper form Company Tax Return (CT600 Version 3).
Note: The service converts accounts into the required format (iXBRL) so there is no need to buy any accounting software. Use a different process if you need to file a confirmation statement (annual return) with Companies House.
Company Tax Return Penalties (late filing)
There are severe penalties for late filing of Company Tax Returns. The penalties you would have to pay for failing to file a Company Tax Return by the deadline are:
- 1 day after the deadline: £100 penalty
- 3 months after the deadline: Another £100
- 6 months after the deadline: HMRC estimate Corporation Tax bill and add a 10% penalty of unpaid taxes
- 12 months after the deadline: Another 10% of any unpaid taxes
Note: £100 late filing penalties increase to £500 each if a tax return is late three (3) times in a row.
If a Company Tax Return is 6 Months Late
HM Revenue and Customs will send you a ‘tax determination’ if your tax return is more than six (6) months late. The letter will inform you the amount of Corporation Tax that they believe you need to pay. But, you would be able to appeal against a ‘tax determination’.
If it happens, you must pay the amount of Corporation Tax that is due and file a tax return. HM Revenue and Customs would then recalculate the interest and penalties that you would need to pay.
Appealing against a Late Filing Penalty
If you disagree with a tax decision, and have a reasonable excuse, you can make an appeal against a late filing penalty. You would need to write to the appropriate Corporation Tax office.
Note: Your Corporation Tax office address will be on any recent tax forms or letters from HMRC. You can also contact the Corporation Tax helpline about tax enquiries.
Making a Change to a Company Tax Return
As a rule, you need to make any ‘amendments’ (changes) within twelve (12) months of the filing deadline. There are two ways to make corrections to a Company Tax Return:
- Log in to HMRC online tax services to amend a Company Tax Return (see above).
- Write to the Corporation Tax office that your company uses.
Note: HMRC can charge a penalty if you make filing errors. They might also carry out a tax compliance check to look for errors in your Company Tax Return.