Corporation Tax Self-Assessment
Corporation Tax is payable on the taxable profits of limited companies, as well as a number of other organisations, such as clubs, associations and societies. If you are liable for Corporation Tax, you are obliged to complete and file an annual tax return to HM Revenue & Customs, which is where the self-assessment comes in. Corporation Tax Self-Assessment (CTSA) is different to self-assessment for individuals, although the principle is the same: you are responsible for figuring out and paying the right amount of tax.
What are the practical implications of CTSA?
There are a number of important things concerning Corporation Tax Self-Assessment that must be remembered. These include:
The self-assessment filing deadline. You will receive a “notice to file”, which will give you 12 months to complete your self-assessment and file your return. Your tax return must be filed online and in the correct format.
Penalties. Late submission of your tax return will result in penalties of £100 (where your return is up to three months late), or £200 (over three months late). Additional penalties apply if the return is more than six or twelve months late. These penalties are equivalent to 10% of the tax payments that are due on those dates.
Advance payment of tax. The tax you have calculated must be paid before the due filing deadline for your return. There is a fixed corporation tax payment due date, which is 9 months and one day after the final day of the accounting period.
Late payment penalties. Interest will be charged on late payments or delays caused by any mistakes that are made.
Credit interest. If a company pays tax before the due date, it receives credit interest on amounts paid early. Any interest received is chargeable to corporation tax.
Shareholder loans. When a close company loans money to a shareholder, that company has to make a payment to HMRC if that loan is not repaid within 9 months following the end of the relevant accounting period. The tax amount payable is 32.5% of the loan, which is included in the CTSA system and must be reported to relevant parties in the tax return.
What happens once your self-assessment is filed?
Once your company or organisation’s corporate tax self-assessment returns have been filed, it will be subject to:
Taxpayer Amendment: you have 12 months to make any amendments.
HMRC Correction: HMRC has 9 months to correct any obvious or superficial errors, such as those in calculations.
HMRC Enquiry: HMRC has 12 months to carry out a much more rigorous enquiry into your company’s business, including careful examination of all business records.
How can Perrigo Consultants help?
At Perrigo Consultants, we take all the stress out of preparing and filing your corporate tax returns. Our team of experienced corporate tax accountants, as well as all the latest software and internal systems, means you have complete peace of mind all year round.
We remind you well in advance of all filing deadlines, making sure we request the right paperwork from you and that any allowances and adjustments are included long before your deadline. For an initial chat or a no-obligation quote, call us at Perrigo Consultants today on 01299 488860 or email us at: firstname.lastname@example.org. We look forward to hearing from you.