How and when does my company file Corporation Tax?
In our blog series, we want to provide you with a one stop shop to help simplify the financial process for your company so that you can continue to focus on running your business. In this blog, we provide a brief lowdown on Corporation Tax – what it is, who needs to pay it and most importantly, when, as well as useful links to helpful resources.
Corporation tax in a nutshell
Corporation tax is the tax that you’re required to pay on any profits before dividends made by a limited company during its accountancy period.
Who pays Corporation Tax?
HMRC advises that if you’re a limited company, a foreign company with a UK office; or a club, co-operative of other unincorporated association such as a community group or sports club, you must pay Corporation Tax on profits.
How to process your Corporation Tax
For further details on this, visit HMRC Corporation Tax. In summary:
- When you start or restart a business, you’ll need to register for Corporation Tax
- Associations must also register with HMRC
- Calculate how much Corporation Tax you need to pay by keeping accounting records and completing a company tax return
What are the key deadlines for Corporation Tax?
When you start your tax accounting period you need to inform HMRC within 3 months if your limited company is active and falls within the requirements for Corporation Tax.
To avoid incurring penalties for late payment, your Corporation Tax deadline is usually 9 months and 1 day after the end of your ‘accounting period’.
However, for large companies with taxable profits over £1.5million, check with HMRC on your payment dates, check the guidelines here.
It’s also worth noting the benefits of paying your Corporation Tax early. If you pay within 6 months and 13 days after the start of your accounting period, HMRC will pay you interest which is currently 0.5%!
However, don’t forget that this interest will need to be recorded in your company accounts as it is taxable.
Do you need help with Corporation Tax?
Why not contact our team of chartered accountants in Oxted, Surrey to see how we can help your business navigate your financial journey with our accounting services.
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