Corporation tax returns are mandatory for all UK companies registered at The Companies House. Tax is due on your calculation of tax-adjusted trading profit over the twelve months of your accounting period.

Corporation tax calculations are almost always best handled by qualified accountants. At VTAX our professional knowledge helps you make sure you can claim all allowances correctly, and minimise your tax liability.

What are tax adjusted trading profits?

Your business pays Corporation Tax on tax-adjusted trading profits. The starting point is your revenue minus your expenditure as recorded in your annual trading statement. The task then is to record a range of adjustments to your profit figure.

Corporation Tax Returns and Computations

There are 2 main components of a company tax return, these are:

  • Profit or loss for corporation tax
  • Corporation tax bill

Your tax return must be filed before 12 months after the end of the accounting period it covers. you must show the calculation of the profits chargeable to corporation tax, also known as the ‘tax computation’.

Entrusting this responsibility with one of our qualified accountants can alleviate the pressure that comes with correctly preparing and filing your tax return, and we can ensure everything is completed on time.

Corporate Tax rate

A new 25% rate of Corporation Tax will be introduced from 1 April 2023 where the profit is £250,000 or more. The current rate of 19% will continue, but only for companies with a profit below £50,000; and any company with a profit of between £50,000 and £250,000 will be subject to a tapered rate between 19% and 25%.

Penalties for late filing of the CT600 Corporate tax return

If you miss the deadline to file your company tax return, fines can mount up very quickly, and HMRC may charge you one of the following fines up to a year:

  • One day late: £100 penalty
  • Three months late: Another £100 penalty.
  • Six months late: An additional penalty of 10% of your estimated corporation tax bill. HMRC makes this estimate, and you are unable to appeal against it.
  • Twelve months late: Another 10% penalty of your estimated corporation tax bill.
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