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When you set up a limited company and begin trading, you have a legal obligation to prepare a Company Tax Return after the end of every ‘accounting period’ and deliver it to HMRC. This guide explains how to complete and submit a tax return, the information you need to include, and the filing deadline you must meet.
Preparing a Company Tax Return for your limited company
All companies in the UK must complete a Company Tax Return for HMRC at least once every 12 months if they are ‘active’ for Corporation Tax. To be able to do this, you must first register for Corporation Tax with HMRC.
The purpose of a return is to report the income, expenditure, profit or loss, and Corporation Tax liability of a company during a specified period of time, known as the ‘accounting period’.
A Company Tax Return consists of:
- form CT600
- supplementary pages (forms CT600A – CT600N), where applicable
- full (statutory) annual accounts
- tax computations showing how the figures stated on form CT600 and any supplementary pages were derived from the relevant figures in the annual accounts
- any other relevant attachments to support the tax return
HMRC will send a ‘Notice to deliver a Company Tax Return’ to your registered office address to remind you that one is due. The filing deadline is normally 12 months after the end of your Corporation Tax accounting period.
You can complete the tax return yourself, or you can appoint an accountant to prepare and file it on your company’s behalf.
What to include in your Company Tax Return
The key information that you must enter on form CT600 includes (but is not limited to) the following:
- Full company name – enter the official, registered name of the company, including ‘Ltd’ or ‘Limited’ (or the Welsh equivalent, if applicable) at the end
- Company registration number – you can find this number on your company’s certificate of incorporation, on correspondence from Companies House, or by searching the Companies House register online
- Company Unique Taxpayer Reference (UTR) – you can find your 10-digit company UTR on official letters from HMRC, including the Notice to deliver a Company Tax Return
- Type of company – enter 0 (zero) if none of the company types stated on the form apply
- The Corporation Tax accounting period covered in the tax return – this is normally a 12-month period that aligns with the financial year in the annual accounts
- Comprehensive tax calculations for the accounting period, including turnover, income, chargeable gains, total profit before and after deductions, and the amount of Corporation Tax the company owes
There are many other details that you may or may not have to include on form CT600 and the supplementary pages. It depends on your company’s particular activities. For full guidance on what to include, please refer to HMRC’s Company Tax Return guide.
The return declaration
The person who completes and files the Company Tax Return must include a declaration that, to the best of their knowledge and belief, the information they are providing is correct and complete. This is usually the director, company secretary, or accountant.
If you appoint a tax agent (e.g. an accountant) to complete and submit the tax return on your company’s behalf, the agent must complete the declaration.
However, if a tax agent is only responsible for submitting the return (rather than also completing it), the declaration must be made by an officer of the company, e.g. a director or company secretary, or other authorised person.
Full annual accounts
Your Company Tax Return must be accompanied by full (statutory) annual accounts. These accounts should include:
- a balance sheet
- a profit and loss account
- notes about the accounts
- a director’s report
- an auditor’s report (depending on the size of your company, audit exemption may be available)
The financial year covered by the annual accounts is usually the same 12 months as the accounting period covered by the Company Tax Return. However, this may not be the case at the end of the company’s first year. We discuss this in more detail below.
How to file your Company Tax Return
Almost all companies are required to file their tax returns electronically using either:
- HMRC Corporation Tax online filing service; or
- commercial third-party software that has passed HMRC’s testing procedures
HMRC’s service will automatically convert your annual accounts to the required format of Inline eXtensible Business Reporting Language (iXBRL). This is an IT standard that is specifically designed for business financial reporting.
It will also help you to work out your company’s profit or loss adjusted for tax purposes, and automatically complete the majority of form CT600 for you.
To use HMRC’s online service, you will need your:
- company’s statutory annual accounts – the accounts must be ‘balanced’, so the total assets of the company should match what it owes
- Government Gateway user ID and password – if you don’t have a user ID, you will need to create one when you use the service for the first time
If you plan to file your annual accounts with Companies House at the same time as submitting the tax return to HMRC, you will also need your Companies House password and authentication code to hand.
Exemptions from online filing
In certain circumstances, a company may be exempt from online filing. You can complete and submit the paper form CT600 instead if you:
- have a reasonable excuse that prevents you from filing online
- want to file your tax return in Welsh
You will also need to include form WT1 to explain why you are using the paper form.
HMRC’s Company Taxation Manual COM60040: CT online filing provides more information on exemptions.
Working out your accounting period and filing deadline
Your company’s accounting period for Corporation Tax determines the deadlines for filing your Company Tax Return and paying your Corporation Tax bill.
The ‘accounting period’ is the time covered by the Company Tax Return. It begins on the day that your company becomes ‘active’ for Corporation Tax (e.g. the day you start trading).
It cannot be longer than 12 months and it normally corresponds with the financial year covered by the annual accounts. HMRC will send a letter to your registered office address confirming your first accounting period when you register for Corporation Tax.
The deadline for filing your Company Tax Return is 12 months after the end of the accounting period for Corporation Tax.
For example, if your accounting period starts on 16 November 2023 and ends on 15 November 2024, you must deliver the Company Tax Return for that period by 15 November 2025.
If your company’s accounting period and financial year are different
Sometimes, a company’s accounting period for Corporation Tax may not be the same as its financial year. This is often the case in the first year of business.
Your very first annual accounts will probably cover more than 12 months. This is because your company’s financial year:
- starts on the date your company is incorporated at Companies House, and
- ends on the accounting reference date (ARD), which is the anniversary of the last day of the month of incorporation
For example, if you were to set up a company on 16 November 2023, your accounting reference date would be 30 November 2024. Therefore, your company’s first financial year would run from 16 November 2023 until 30 November 2024, which is more than 12 months.
Since your accounting period cannot be longer than 12 months, you may have to complete two Company Tax Returns to cover the financial year in the first accounts.
It depends on whether you start trading on the day that you set up your company, or at a later date.
Let’s say that your company starts trading on the same day that it is set up. Using the example dates above, you would have to prepare:
- one tax return with an accounting period of 16 November 2023 to 15 November 2024
- a second tax return with an accounting period of 16–30 November 2024
In subsequent years, the 12-month accounting period covered by the Company Tax Return should align with the 12-month financial year covered by the annual accounts. This means that your company’s financial year and accounting period would be 1 December to 30 November.
Corporation Tax payment deadline
The deadline for paying your company’s Corporation Tax bill is 9 months and 1 day after the end of your accounting period.
For example, if your accounting period ends on 30 November, you must pay the Corporation Bill for that period by 1 September the following year.
However, you may have two payment deadlines for your first year in business. This will be the case if your first financial year is longer than 12 months, and you have to file two Company Tax Returns to cover that period of time.
Since Corporation Tax is due before the Company Tax Return filing deadline, you should prepare your tax return as soon as possible after the end of the accounting period.
HMRC will send you a Corporation Tax bill with the payment deadline and information on how to pay.
Who needs to file a Company Tax Return?
A range of different bodies are legally required to prepare a Company Tax Return for HMRC, including:
- private companies limited by shares
- private companies limited by guarantee
- unlimited companies
- public limited companies (PLCs)
- community interest companies (CICs)
- unincorporated associations
- members’ clubs
- trade organisations
- societies and other unincorporated bodies
- overseas companies resident in the UK
- non-resident companies trading in the UK through a permanent establishment
If you are a sole trader or in a business partnership, you do not send a Company Tax Return. Instead, you must send a Self Assessment return to HMRC every year.
If your company is dormant for Corporation Tax purposes, you do not have to complete a Company Tax Return or accounts for HMRC for as long as the company remains dormant. However, you must tell HMRC that your company is dormant, otherwise they may ask you to send a tax return.
A company may be dormant if it is:
- a new company that has not started trading
- a company that is never going to trade because it has only been set up to hold an asset (e.g. land or intellectual property)
- set up as a flat management company (also known as a Right to Manage company)
- an existing company that has stopped trading, either temporarily or indefinitely, and has no other income
- an unincorporated association or club that owes less than £100 Corporation Tax
- a company that has ceased trading and is going to be wound up and removed from the Companies House register
If your company is new or has become dormant after previously trading, you must tell HMRC within 3 months, if and when you do start trading. To do so, you simply register for Corporation Tax online.
Whilst dormant companies do not have any filing obligations for HMRC, you will still need to prepare annual accounts and an annual confirmation statement for Companies House. You must also continue to maintain your company’s statutory registers and report any change of details to Companies House.
My company made a loss – do I have to submit a tax return?
You must prepare a Company Tax Return even if your company makes a loss and/or you do not have any Corporation Tax to pay. HMRC still needs to know about your company’s income and expenditure, profits or losses, and the calculations and computations you used to work out your tax liability.
If you do not owe any Corporation Tax, you must notify HMRC by submitting the ‘nil to pay’ form. You should do this before filing your Company Tax Return, otherwise HMRC will send you payment reminders.
Late filing penalties
HMRC is very strict when it comes to filing and payment deadlines, so you must endeavour to prepare and file your Company Tax Return by the deadline – 12 months after the end of your company’s accounting period.
If you deliver your tax return late, the following late filing penalties will apply:
- 1 day after the deadline – £100 fine
- 3 months after the deadline – an additional £100 fine
- 6 months late after the deadline – HMRC will estimate your company’s Corporation Tax bill and charge you 10% of the unpaid amount
- 12 months after the deadline – an additional 10% of any unpaid Corporation Tax
If you file your Company Tax Return late three times in a row, the £100 penalties will automatically increase to £500.
You can only appeal these penalties if you have a reasonable excuse. If you want to appeal, you must write to your company’s Corporation Tax office. You will find the address on any official letter you have received from HMRC, including the Notice to deliver a Company Tax Return.
Can I make changes to a Company Tax Return?
You can usually make changes to a Company Tax Return up to 12 months after the filing deadline. You can do this in one of the following ways:
- using HMRC online service
- using commercial software
- by sending a paper tax return
- by writing to your Corporation Tax office.
Contact HMRC’s Corporation Tax helpline if you have any questions about making changes to a tax return.
Should I appoint an accountant to prepare my Company Tax Return?
Limited company accounting and tax requirements can be time-consuming and particularly complex, more so if you do not have any relevant experience. Whilst you are allowed to prepare Company Tax Returns and accounts yourself, we would always recommend that you appoint an accountant to take care of these things for you.
This will ensure that your company finances and tax affairs are being expertly managed, and completed in accordance with the statutory requirements. A good accountant will also understand how to minimise your company’s expenditure and tax liability and help you to grow and develop your business
You must tell HMRC if you appoint and authorise someone to deal with your company’s tax affairs. If you use an accountant, they will tell you how to do this.
Thanks for reading
Preparing a Company Tax Return for HMRC can be a challenging task, and it’s easy to make mistakes. Whilst HMRC provides comprehensive guidance, it makes sense to lighten the load by appointing an expert to take care of your tax returns and accounting needs.
We hope that this guide has explained the process involved in preparing and filing a Company Tax Return. If you have any questions, or would like to speak to someone about setting up a limited company in the UK, please leave a comment below or get in touch with our team.