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Registration

To ensure avoidance of penalties, companies should notify HM Revenue & Customs within 3 months of commencing trading which is normally done at the same time as registering with Companies House.

Filing Dates of Returns

The corporation tax self-assessment return (CTSA) must be submitted to HMRC along with the accounts and tax computations, although it is possible to file all this information online through the HMRC website. The filing deadline for the CTSA return (plus accounts and tax computations) is normally 12 months from the end of the accounting period. If the return is late there are penalties as follows...

• Up to 3 months late - £100 (increasing to £500 for a third consecutive late return)
• Over 3 months late - £200 (increased to £1000 for a third consecutive late return)
• 6 to 12 months late - Extra tax geared penalty of 10% of the unpaid tax.
• More than 12 months late - 20% of the unpaid tax.

Payment Dates For Corporation Tax

This is usually 9 months and 1 day after the end of the accounting period for small companies.

Large companies (with taxable profits over £1.5 million, adjusted for associated companies) must pay in 4 quarterly instalments, with the first payment due 6 months and 13 days into the accounting period. These companies must estimate their final tax liability when making these payments.

Companies that are part of a group may have a lower threshold for large company status and could be required to pay Corporation Tax in instalments.

Very large companies (profits over £20 million, adjusted for groups) must start making payments 2 months and 13 days into the accounting period.

Interest is charged on late payments.

CT61 Returns

Companies are required to deduct income tax from certain payments (such as specific interest payments) and remit this to HMRC. Standard return periods end on 31 March, 30 June, 30 September, and 31 December. If a company's accounting period does not align with these dates, an additional return is necessary for the period up to the accounting period end. The CT61 return and the corresponding tax payment must be submitted to HMRC within 14 days after the end of each return period.

Time Limits for Correcting and Enquiring into Tax Returns

HMRC has nine months from the date a company tax return is filed to correct obvious errors or omissions. Companies can amend their tax return within 12 months from the statutory filing date.

HMRC can initiate an enquiry into a company tax return within:

• 12 months from the date the return was filed, if filed on or before the deadline.
• Up to and including the quarter day (31 January, 30 April, 31 July, or 31 October) following the first anniversary of the filing date, if the return was filed late.
• For amended returns, within 12 months from the date of the amendment, or up to and including the quarter day following the first anniversary of the amendment if filed late.

Discovery Assessments

If HMRC discovers an underpayment of tax, it can issue a discovery assessment within:

• 4 years after the end of the records

Records must normally be kept in support of the return for 6 years from the end of the accounting period. The penalty for non-compliance can be as much as £3000 for each accounting period.

How we can help you

We can assist you with all aspects of corporation tax compliance and planning.