Payment must be made electronically before the corporation tax return is filed, with the deadline being nine months and a day from the end of your accounting year. Form CT must also be filed online, and should include all computations and calculations with regard to the amount paid. In the first year of trading it may be necessary to file two corporation tax returns if your accounts cover more than 12 months. They should be submitted at the same time, along with the statutory accounts.
Other types of organisation may also incur a corporation tax liability depending on their structure, including charities, housing associations, societies and cooperatives. Begbies Traynor can advise on your responsibilities in relation to corporation tax , and ensure your company remains HMRC compliant.
Call one of our licensed insolvency practitioners to arrange a free same-day consultation to establish your needs. Here at Begbies Traynor Group we take your privacy seriously and will only use your personal information to contact you with regards to your enquiry.
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UK We use some essential cookies to make this website work. Accept additional cookies Reject additional cookies View cookies. Hide this message. Home Business and self-employed Business tax. Keep in mind that you can no longer pay with a personal credit card, so you'll need to have the funds available.
If you're late submitting your return, paying your tax bill, or you've shared inaccurate information, HMRC has the power to fine you. The company director can be held liable, so even if an accountant filled out and submitted your return, you'll be the one to pay the penalty.
If you don't pay the tax on time, you'll be charged interest on the amount you owe and may also have to pay a penalty or surcharge.
If you can't afford to pay, HMRC suggests contacting them as soon as possible, as you may be able to set up a payment plan. Alternatively, if you've simply missed your payment date, you should contact the Self Assessment helpline on How much you have to pay depends on whether HMRC believes the mistake was deliberate, whether you tried to hide it, and whether you voluntarily admit to it before HMRC finds out. If you want to make any changes to your company tax return, you'll usually need to do it within 12 months of the filing deadline.
You can do it online, using commercial software or by sending a paper return to your company's corporation tax office. Once you notice a mistake or inaccuracy in your accounts, you must send an amendment to Companies House on paper, clearly requesting to replace the original accounts, that the new records are now the statutory accounts and that they were prepared as at the date of the original accounts.
Corporation tax can mean a huge bill for some companies - so it's worth making sure you're not paying more tax than you need to. All companies can deduct costs for expenses that have been incurred purely for use by the business. This can include things like train tickets for meetings, office equipment, petty cash for tea and biscuits, plus other things specific to your industry. If you have employees, salaries and employer National Insurance contributions also count as a business expense, and can be deducted from the company's taxable profits.
There are no rules on exactly what can and can't be claimed. You just need to make sure the item or service was used exclusively for business purposes. By deducting the costs of these expenses from your business profit, you reduce the amount you'll have to pay tax on and ultimately lower your tax bill. The profits earned by the company are not yours, even if you're the only person working for it.
So you may decide to pay yourself a salary. Like with any other employee, your salary is a business expense, as are any National Insurance contributions the company makes on your behalf.
So you can reduce the company's taxable profits by paying yourself. However, you'll need to pay income tax on these earnings, as well as make employee National Insurance contributions.
Because of this, it may make sense to keep your salary under the higher-rate threshold, or even below the personal allowance limit.
In addition, many owners of limited companies choose to pay themselves in dividends , as these tend to be taxed at a lower rate than income tax. But dividends cannot be deducted as a business expense. If payments are not made, HMRC may pursue one of several courses of action to ensure the outstanding Corporation Tax is paid; these include:.
It is critical that outstanding Corporation Tax is paid on time, as the implications of not paying can be severe — they may even put your business in jeopardy. If you are unable to pay your outstanding Corporation Tax, HMRC may be able to help through setting up a payment plan.
They must be contacted as soon as possible, not after deadlines have passed. Note that large companies that are required to pay by instalments can incur a penalty if payments are not made on time.
Submitting a Corporation Tax return with inaccurate information can cause all manner of issues, starting with an assortment of potential fines. There are different ways in which HMRC perceive errors, and penalties will vary depending on the severity of the inaccuracy, whether the inaccuracy was deliberate, and whether you attempted to conceal it. It is critically important that your Corporation Tax returns are completed with attention to detail and a clear understanding of the information being submitted.
Business tax accountants can help ensure your Corporation Tax returns are completed accurately and error free. The Corporation Tax rate in the UK has been getting lower since There is no Corporation Tax threshold - all limited companies pay Corporation Tax on their profits. Before , the amount of corporation tax you would pay depended on the profitability of the business.
Companies whose profits were between those amounts would pay at a hybrid rate between the small and main rates. In the years prior to the gap between the rates was greater. This is no longer the case as the main rate and small profits rate are the same. The worldwide average corporate tax rate in was Below are the corporate tax rates for the G20 nations as at December , as stated by Trading Economics :.
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