AudTax, Corporation Tax Accountants
Navigating the complexities of corporate tax can be a challenging task for limited company directors. At AudTax, we specialise in providing comprehensive Corporation Tax services to ease the burden of completing your company tax return.
Our team of highly-qualified accountants is dedicated to staying up-to-date with ever-changing tax regulations, ensuring that your business remains compliant while maximising its tax savings.
To discuss your Corporation Tax return requirements, please get in touch to arrange a free consultation.
Our Corporation Tax services
When you choose AudTax as your Corporation Tax accountant, you can benefit from our comprehensive range of services, including:
Annual accounts preparation
Using compatible cloud accounting software, we produce accurate and compliant company accounts for our clients in line with HMRC requirements.
In addition, we can produce more frequent management accounts to support informed decision-making.
Tax compliance and tax planning
Our tax experts will handle all aspects of your Corporation Tax compliance, from preparing and filing tax returns to ensuring adherence to tax legislation.
We will work closely with you to develop effective tax planning strategies that save you money and align with your business goals.
Tax reliefs and incentives
Our team stays informed about the latest tax relief schemes and incentives that can benefit your business. We will proactively identify opportunities for claiming tax credits, allowances, and exemptions, helping you unlock potential tax savings and improve your overall tax position.
Tax strategy and advisory
We go beyond compliance and provide strategic tax advice tailored to your business. Our experts will analyse your financial situation, identify areas of tax risk, and recommend effective strategies to optimise your tax position.
Whether it’s restructuring your business or exploring tax-efficient investment options, we’ll guide you towards making informed decisions that drive long-term success.
Who pays Corporation Tax?
All limited companies, including both private and public limited companies, have a Corporation Tax liability. Whether you are a small business, a large corporation, or a foreign company operating in the UK, you are required to pay Corporation Tax on your taxable profits.
Sole traders do not pay Corporation Tax. Instead, they must submit self-assessment tax returns and pay Income Tax. They must also pay Capital Gains Tax on gains made from asset sales. The same applies to the members of a limited liability partnership (LLP).
How are taxable profits calculated?
A Corporation Tax return requires the production of certain annual reports, such as a profit and loss account and a balance sheet. These financial statements provide the basis for determining your company’s taxable profits.
To calculate your taxable profits, you must deduct allowable business expenses from the company’s gross profit, including company sales, income from investments and any profit from selling business assets.
Allowable expenses include office rent, employee salaries, travel expenses, professional fees (such as legal or accounting services), marketing and advertising costs, utility bills, and office supplies.
Additionally, certain adjustments and tax reliefs may apply, such as capital allowances for investments in qualifying assets or research and development (R&D) tax credits for eligible R&D activities.
Once the taxable profit has been calculated, the rate of tax you pay will be in line with how much profit your company makes.
When is the deadline for Corporation Tax Returns?
The tax filing deadline is based on your company’s financial year-end. Generally, companies are required to pay tax within nine months and one day after the end of their financial year.
For example, if your company’s financial year ends on December 31st, the deadline for paying corporate tax would be September 1st of the following year. It’s important to meet these deadlines to avoid penalties and interest charges.
What happens if I file my company tax return incorrectly?
Filing company tax returns incorrectly can lead to penalties and interest charges. It’s essential, therefore, to ensure accurate and timely submission to avoid financial and legal implications. Late filing can also trigger an HMRC investigation.
Penalties for late filing or incorrect returns depend on whether the error is deemed deliberate or careless. Charges start at £100 penalty for one day overdue.
Once your tax return is six months late, HMRC makes an estimation on your tax bill and charges an additional penalty of 10%. If you should go past the 12-month late mark, you will receive another 10% penalty on your estimated Corporation Tax bill. You cannot appeal against your estimated Corporation Tax bill.
Fortunately, the expert team at Audtax is here to offer corporate tax advice and services to ensure that your company tax return is filed correctly and on time.
Frequently asked questions about corporation tax
Do dividends reduce Corporation Tax?
No, dividends do not reduce corporate tax liability as they are paid from the company’s net profit after tax.
What is an accounting period for tax?
An accounting period usually covers a 12-month period and is used to determine the taxable profits on which corporation tax is levied. It usually starts from the date your company is incorporated by Companies House.
What is marginal relief?
Marginal relief is a provision in the UK tax system that offers partial tax relief to companies whose profits fall between the small business rate and the main rate of Corporation Tax.
This mechanism ensures a fairer and more gradual increase in tax liability as profits rise, avoiding abrupt changes that could negatively impact small businesses.
What is the annual investment allowance?
This is a tax allowance that enables businesses to deduct the full cost of qualifying capital expenditures, such as machinery, equipment, and vehicles, up to a specified limit, from their taxable profits in the year of purchase.