Corporation tax returns

What is corporation tax

Accompanying your annual accounts, Directors have an obligation to file a company tax return, known as a CT600, to calculate and pay their corporation tax. The current rate of corporation tax is at 19% and is levied on the profits of your business and include gains made through trading, investments or selling assets.

Unlike income tax, you have no tax free allowance with corporation tax and will be taxed for each £1 of taxable profit. However, you can reduce your tax through allowable deductions and expenses.

If your business makes a loss, you can carry those losses across to offset against future (or previous) corporation tax profits.

You will need to file your corporation tax return one year after your accounting period and settle any corporation tax due nine months and one day after the end of your accounting period.

How can I reduce how much corporation tax I pay?

Reducing your corporation tax is about reducing your taxable profits. This can come in many forms, such as paying yourself an increased salary (albeit this will incur additional income tax), increasing your pension contributions, making further investments into your business or exploring possible reliefs available, such as R&D or possible industry related tax reliefs.

Another simple way to reduce the amount of tax is to ensure you are vigilant in expending as much as you can through your business, if it is for business purposes.

How we look after your corporation tax

Because corporation tax is linked to your company accounts and will require a set of full accounts to accompany any submission, we will always complete your corporation tax filing in conjunction with the production of your annual accounts. This means we will discuss your corporation tax at the same time we produce your accounts.

We will take your accounts and work through each line and make adjustments accordingly in line with what is an allowable or disallowable expense and advise you of how we define your taxable profit.

We will review any large (capital) purchases and ensure you are maximising your reliefs, such as your annual investment allowance, so as to ensure you recover the full corporation tax relief possible in the tax year.

After you agree your tax return, we will manage and file any returns with HMRC and make the necessary entries in your accounting ledger on your behalf.