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What is a company tax return?

What is a company tax return?
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    Businesses registered with Companies House must submit annual returns that outline their financial performance and calculate any corporation tax payable. But what is a company tax return? And how often are they needed?

    A company tax return refers to the financial information that businesses file each year detailing their profits, losses, loans and other financial factors that influence their tax liability. This information is then used to calculate the corporation tax that the business owes for that year.

    Company tax returns are submitted to HMRC annually, with strict deadlines and penalties enforced for late submissions. It’s therefore important to get organised early and ensure you submit your company tax return on time.

    A business owner can file their tax return themselves or choose to elect professionals such as WIS Accountancy to submit the relevant documents on their behalf.

    How to submit a company tax return

    Business owners must register for a Government Gateway account in order to submit their tax returns online, as paper submissions can only be made in certain circumstances, such as if the submission is in Welsh.

    Setting up a Government Gateway account can take some time as formal identification is required. It is therefore, important to ensure you allow plenty of time for this step ahead of submission deadlines.

    Before you begin your tax return, you must first ensure your accounts are balanced, in other words, that your assets correspond to your profits, losses and loans for that year.

    When does a company tax return need to be submitted?

    A company tax return must be submitted 12 months after the end of the company’s accounting period or when requested by a HMRC issued notice. For limited companies, the company tax return can be timed for submission at the same time as their financial return to Companies House.

    Businesses must file a return regardless of whether the company is making a profit or loss, with any corporation tax applicable then paid within nine months and one day after the end of the accounting period covered by the company tax return. Payments of corporation tax can be made online or by telephone banking.

    What are the penalties for missing submission deadlines?

    There are hefty penalties for missing the tax return submission deadlines. Upon missing the deadlines by one day, a business can face a £100 penalty. If not paid within three months, this fine will double.

    If a company has not submitted their tax return within six months of the deadline, HMRC estimates the corporation tax payable and adds a further penalty of 10% to this. In this situation, the business must settle the estimated corporation tax, after which the interest and penalties are due.

    Should a business fail to file its company tax return, the tax estimate completed by HMRC is referred to as tax determination. This is non-negotiable and cannot be appealed against, with a further 10% interest added should the business fail to pay within 12 months.

    HMRC has been cracking down on late submissions and has also ramped up the fines for repeat offenders. Therefore, if a company makes late tax submissions three times in a row, the penalties increase from £100 to £500 for each deadline missed.

    Should there be a reasonable circumstance at play causing late submissions, an appeal against penalties charged can be made by writing to the Corporation Tax office.

    What to do if there is an error in your company tax return

    Should a business owner need to correct any details within a submitted tax return, an amendment would need to be submitted within twelve months of the original filing date.

    Please note that HMRC may charge penalties for errors within the original submission.

    Professional tax returns from WIS Accountancy

    Still wondering what a company tax return is? The experts at WIS Accountancy can provide professional assistance with completing your company tax return or making amendments to a previous submission.

    We assist businesses across London, Essex, Hertfordshire and Kent with all their accountancy needs alongside our business insurance and mortgage services. Get in touch with the WIS Accountancy team today at 0203 011 1898, or use our online contact form. We are here to help your business succeed.


    How does a tax return work?

    A company tax return contains the entity’s financial information so that any tax liability can be calculated by HMRC.

    The reporting process is nearly always undertaken online and strict deadlines must be met in order to avoid penalty charges.

    Who can file a tax return?

    Business owners themselves can submit a company tax return if confident to do so, or they can nominate an accounting practice to undertake this task on their behalf.

    To avoid costly errors or late penalties, we recommend utilising the services of a when submitting your company tax return.

    Are company tax returns a public record in the UK?

    Companies House is a public register containing various documents and information about incorporated companies, and all registered companies must submit specific information, including copies of annual accounts, that will be publicly disclosed.

    Anyone can view business information, including details of the directors, by searching for an entity on the Companies House website.

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