Corporation Tax

What is Corporation Tax?

Corporation Tax is the tax paid to HMRC as a result of profits made by a business. This could be as a result of the businesses trade, selling business assets or making a profit on business investments. All limited companies which are trading will be required to submit a Corporation Tax return to HMRC.

How much do I have to pay?

The current Corporation Tax rate is 25% (previously 19%). There are reliefs available for businesses with profits under £250,000 per annum, we can support you to ensure you are taking advantage of these! The Corporation Tax liability is payable on the taxable profits for the relevant accounting period. Unfortunately HMRC won’t tell you how much you need to pay, therefore you are required to self-assess your business, calculate the taxable profits, inform HMRC of this amount and then make the payment of the liability.

What is included in the corporation tax service?

Calculation of taxable profits
Advice and guidance on any tax efficiencies or reliefs available
Preparation of the Corporation Tax return
Submission of the Corporation Tax return to HMRC (including iXBRL accounts)
Liaising with HMRC on Corporation Tax related affairs

Key dates:

Accounting period – your accounting period is the dates which are covered by your company tax return. It can’t be longer than 12 months and is normally the same as the financial year covered by the company’s annual accounts.

Payment deadline – the Corporation Tax liability must be paid to HMRC before 9 months and 1 day following the end of the accounting period.

Filing deadline – the Corporation Tax return must be submitted to HMRC within 12 months following the end of the accounting period.

Where can I find my UTR (Unique Tax Reference)?

When registering your business, HMRC will issue you with a 10-digit Unique Taxpayer Reference (UTR) which will be posted to your registered business address.

Once registered you will be able to find your UTR via your HMRC online account. It can also be found on previous tax returns submitted as well as correspondence received from HMRC relating to Corporation Tax matters.

Should you not be able to obtain this information it is best to call HMRC on the Corporation Tax helpline in order to request a copy of your UTR.

What are the late filing penalties?

If you fail to submit your Corporation Tax return ahead of the deadline (even if there is no liability!), HMRC will apply the following penalties:

£100 immediately after the deadline is missed
Once the return is more than 3 months late – an additional £100
If the return is 6 months late – HMRc will estimate your Corporation Tax liability and add a 10% penalty of the unpaid tax
Once the return is more than 12 months late – an additional 10% penalty of the unpaid tax

If the returns are late 3 times in a row, HMRC will increase the £100 penalties to £500 each!

How do I pay my tax liability?

You can make payments to HMRC using online banking, debit card, corporate credit card, direct debit (if set up with HMRC) or at your bank (if you have a paying-in slip from HMRC). Details of how to make the payments, including the references required can be found on the gov.uk website.

It is important to note than you will receive a late payment penalty from HMRC is the payment does not reach HMRC by the required deadline.

Why use AGILE for my corporation tax services?

Failure to calculate your Corporation Tax liability correctly could result in your business paying too much tax, which will impact your business, or not enough tax which could land you in trouble with HMRC (best to avoid!). It is also imperative that the returns are submitted to HMRC ahead of the relevant deadline. Any errors could result in HMRC inspections, as well as fines or penalties – these can become time consuming and expensive to resolve!

By using Agile your Corporation Tax return will be prepared by a team with years of experience to ensure your Corporation Tax return is completed correctly and you pay the appropriate liability to HMRC. Calculating the liability is not as simple as taking 19% of the profits as there are further adjustments required to the return, therefore it is advisable to allow a professional to assist with the preparation of the Corporation Tax return. Our years of experience and depth of knowledge can ensure you are operating as tax efficiently as possible!

Not only do you get the piece of mind that it has been done correctly, we can also provide Corporation Tax planning advice in order to minimise any Corporation Tax liability. This includes guidance on ensuring you have included all business expenditure and income in the correct period and taking advantage of any tax reliefs available. Tax reliefs range from the Annual Investment Allowance, through to the Super-deduction and R&D tax relief.

Meet your team

We’re always just a phone call away

James Faulkner
ACCA

Founder & Partner

Adam Wright
FCCA FMAAT

Founder & Partner

Dan Ross
MAAT

Small Business Accountant

Jack Taylor

Trainee Accountant

Anish Sroay

Accounts Assistant

Bethan Wright

Office Manager

How do I sign up?

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