If you are registered as a limited company, then you are liable to pay Corporation Tax. This may sound like a lot of responsibility, but with the support of a professional tax accountant, your Corporation Tax liability can be made much more straightforward.
At Butt Miller, we help clients navigate the complexities of Corporation Tax, ensuring they stay compliant and submit their tax returns accurately and on time. Our Corporation Tax services are more than just keeping you compliant. We focus on saving you time and money, utilising the various tax credits and reliefs available.
For more financial clarity and a streamlined tax process, get in touch today.
What is Corporation Tax?
Corporation Tax is a financial obligation which requires limited companies to pay tax on their annual profits.
The amount you pay in Corporation Tax can impact your overall profit and cash flow, which is why it is important to work with a professional accountant who understands the intricacies of tax accounting.
Who needs to pay Corporation Tax?
If your business is a limited company in the UK and has made a taxable annual profit, then you will be required to pay Corporation Tax.
Sole traders and partnerships are subject to different tax rules.
It is important to establish what type of company you operate so that the correct tax return is submitted to HMRC and the right amount of money is paid. The way in which your business operates will also dictate the specific tax allowances and tax reliefs you are entitled to.
How much Corporation Tax does my business need to pay?
The amount of Corporation Tax you will pay to HMRC can vary depending on how much your annual profits are.
As of 1st April 2023, the Corporation Tax rate for profits over £50,000 is 25%. Companies with profits between £50,000 and £250,000 will be eligible for Marginal Relief, which will reduce the company’s tax bill. Small businesses with a profit under £50,000 will continue to pay Corporation Tax at 19%.
This is less than the basic income tax rate of 20%, which sole traders would pay through their Self-Assessment tax return.
Do I need an accountant to file Corporation Tax?
You do not necessarily need an accountant to file a Corporation Tax return (CT600). With that said, the Corporation Tax return can be a complicated document to navigate and, as such, can lead to easily made mistakes, resulting in an inaccurate Corporation Tax bill.
Working with a professional and experienced Corporation Tax accountant at Butt Miller can prevent you from incurring any harsh repercussions of an inaccurate or delayed tax return.
Our Corporation Tax service
At Butt Miller, we can assist you in preparing your company’s financial year-end accounts and, subsequently, the company’s tax return to accurately calculate your tax liability and help you claim any tax reliefs that might be available.
By doing the company’s bookkeeping, we can also provide your business with an estimated Corporation Tax bill so you can prepare accordingly and not get stung out of the blue once your business accounts are filed.
With years of experience in Corporate Tax advice and tax compliance, we can help keep your company in line with the various tax rules and regulations. Whether you have a limited company or are an individual looking to incorporate, we will happily guide you in the right direction.
Get in touch with Butt Miller Corporate Tax accountants and advisors
As qualified accountants, we understand the difficulties of managing the various aspects of Corporation Tax. Not only can we support you in every step of filing your tax returns, but we can also advise you on the best steps to make greater tax savings along the way.
Whether it be advice on share schemes or assisting with HMRC enquiries, please get in touch, and we’d be more than happy to help.
Frequently asked questions about corporation tax
For more information about your Corporation Tax responsibilities, please take a look at some of our most frequently asked questions below.
Is a Company Tax return the same as a Corporation Tax return?
Ultimately, Company Tax returns and Corporation Tax returns are the same thing: a document which limited companies are required to submit to HMRC to calculate the amount of tax due on their annual profits.
Corporation Tax return and Company Tax return can be used interchangeably when talking about a company’s Corporate Tax liabilities.
When is a Corporation Tax return due?
A Corporation Tax return is due 12 months after the end of the company accounting period. However, payment of any Corporation Tax liability is due 9 months and 1 day after the end of the company accounting period.
A notable mishap is that company accounts are due nine months after the accounting period, not 12.
A limited company produces annual accounts with a year end of 30 April 2023. This means that the company accounts must be filed with Companies House by 31 January 2024 and the Corporation Tax return must be filed with HMRC by 30 April 2024.
However, any Corporation Tax bill must be paid to HMRC (or inform HMRC that no payment is due) by 1 February 2024.
It is vital that you meet your tax filing deadline to avoid any late filing penalties from HMRC.
Do I simply pay tax on the profit shown in my business accounts?
Unfortunately, it is not as simple as taking a percentage of the profits that a company makes to work out your tax liability. The amount of profit shown in the accounts can differ from how much is shown on a Company Tax return.
Certain expenses are added back for corporate tax purposes, such as depreciation on fixed assets, certain professional fees and client entertainment.