One of the most vital legal obligations for any business owner is the reporting of tax owed. All limited companies in the UK who receive a notice from HM Revenue and Customs (HMRC) are required to complete a company tax return.

All profits, spending and tax figures for the relevant accounting period are reported to HMRC through a tax return. Even if you don’t make any profit or owe any tax, you’re still required to submit a tax return.

If you haven’t received a notice from HMRC but believe corporation tax will need to be paid, you must contact HMRC. If you don’t, you could face a charge of ‘undeclared tax’.

When to file a company tax return

Unlike personal tax returns, which get filed at the end of the tax year, you can file company tax returns at any time within 12 months of the individual organisation’s accounting period, which may or may not differ from the standard financial year.

For new companies, your first accounting period may be longer than 12 months, so you’ll need to submit two returns in that period. This initial timeframe is determined by Companies House.

How to send a tax return

Almost all limited company tax returns need to be submitted online with some notable exceptions. If the tax return is being completed in Welsh, or there is a valid reason why it can’t be submitted digitally, then a CT600 paper form will need to be filed in its place. Acceptable reasons related to medical situations such as life-threatening illnesses and unexpected hospital stays are also valid.

The CT600 form
The CT600 form is an 11-page document with sections for tax calculations, income, chargeable gains, profits, deductions and reliefs. Capital gains, overseas expenditure, and items like renovations to business property will also need to be included.

Penalties for filing late

It’s important that your company tax return is submitted on time as the penalties can be harsh if the deadline is not met, with a £100 fine for going just one day past the deadline applicable. If you continue to delay by a further three months, then another £100 applies. Once it reaches six months, you’ll then be liable to pay an additional 10% of your business’s corporation tax bill, and another 10% if it gets to 12 months. If your tax return is late 3 times in a row, the £100 penalties are increased to £500 each.

Tax return mistakes

When preparing tax returns, mistakes can happen. If you realise you’ve made an error, it’s best to report it to the HMRC as soon as possible after submission. If you advise HMRC of a genuine error early, it’s likely that no fine will apply. However, if HMRC spot it, you could face a penalty of 15-30% of the extra tax due. If you make a ‘deliberate mistake’ and you’re caught, expect to face a penalty of 50-100% of the extra tax due.

Get help with your company tax return

Business finances can be complicated and whether completing online or offline, it can be easy to make mistakes. To avoid late penalties or fines for errors, employing the services of a specialist company tax return accountant provides peace of mind.

Not only will an expert ensure that everything gets filled incorrectly, they’ll also make sure you pay the lowest amount of corporation tax possible. Charnwood Accountants and Business Advisors are experts in this field and can provide your company with the accounting support it needs. To find out more call us on 01509 621833 or email us at today.