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Companies House informs HMRC when a new company is registered, so there is no need for you to contact them yourself. Shortly after company formation, HMRC will post a letter to your registered office address, which will include your company’s Unique Taxpayer Reference (UTR) and information about Corporation Tax.
The UTR is very important because you will need to provide it whenever you contact HMRC about your company’s tax affairs. The letter will explain everything you need to know about your company becoming ‘active’ for corporation tax, including the information that you are required to provide to HMRC.
If you are not planning to start trading immediately, you should contact your local corporation tax office to tell HMRC that your company is dormant. We will discuss dormant company requirements in more detail at the end of this article.
How and when to register for corporation tax
If your company is active (trading) it will be liable for corporation tax on all taxable income. A company is considered active for corporation tax purposes when:
- It carries on any trading or professional business activity.
- Goods and services are bought and sold with a view to making a profit or surplus.
- Income is received.
- Interest is earned.
- It manages investments.
- Staff are employed.
You must register with HMRC for corporation tax purposes, online or in writing, within 3 months of starting any business activity. If you register online, your company will be automatically enrolled for corporation tax online. During the registration process, you will be asked for your company registration number (CRN) and your UTR.
You will be required to set up a Government Gateway account at this time. This is necessary for registering your business for all types of taxes, signing up for any other HMRC online services, and paying your company taxes online.
Once you have set up your Government Gateway account, simply follow the online instructions and provide HMRC with the following statutory information:
- The date you started trading.
- Company name and registration number.
- The address of your main place of business (not your registered office address, unless this is where your main business activities are carried out).
- The nature of your business activities.
- The date to which you intend to prepare your statutory accounts. This will be the default accounting reference date (ARD) provided by Companies House.
HMRC will use this information to work out your corporation tax accounting period. Within seven days of your registration being verified by HMRC, you will receive an Activation Code (or PIN) at your registered office address. You should activate your online services as soon as you get this code because it’s only valid for a short period of time.
Paying corporation tax and filing company tax returns
Active companies are required to pay corporation tax 9 months and 1 day after the end of each accounting period. Typically, an accounting period is 12 months long and will match your 12-month financial year. Company Tax Returns should be filed online 12 months after the end of your accounting period.
Inform HMRC if your company is not trading (dormant)
If your company is inactive (not trading), it will not be liable for corporation tax. You will not be required to register with HMRC for corporation tax or file a tax return whilst it remains dormant. Instead, you must contact your local corporation tax office in writing to inform HMRC that your company is dormant. If it was previously active, you will be asked to submit a Company Tax Return and pay corporation tax for the period of business activity.
If your company has never traded, you should state the date of incorporation as the date it became dormant. Within approximately 15 days, you should receive notification from the tax office to confirm your dormant status. You should not have to contact HMRC again until you begin trading.