Company tax return: filing, deadlines and penalties

Can I submit my own company tax return?

Yes. A company can either get an accountant to prepare and file its tax return or do it itself. If the directors do not want to prepare the return themselves, they can appoint someone else to deal with HMRC on the company's behalf. ^[2]

Doing it in-house means completing the Company Tax Return form (CT600) and including computations that show how the figures in the return were calculated from the company accounts, and if accounts and computations are not being submitted, box 90 is used to explain the reasons, which is an area business accounting services may help with. The accounts themselves are covered in preparing and filing company accounts.

The return should be filed online using commercial software. A paper return can only be filed if the company has a reasonable excuse or is filing in Welsh. ^[3]

When is the Company Tax Return deadline?

The deadline for a Company Tax Return is 12 months after the end of the accounting period it covers, and a penalty for late filing applies if the deadline is missed. ^[1]

Paying the Corporation Tax bill has a separate deadline, which is usually 9 months and one day after the end of the accounting period.

The period itself is entered on the CT600, with the beginning date in box 30 and the end date in box 35.

What goes on the CT600 form

A company or association must file a Company Tax Return if it gets a notice to deliver a Company Tax Return from HMRC. A return must still be sent if the company makes a loss or has no Corporation Tax to pay. Sole traders and partnerships do not send a Company Tax Return, but they must send a Self Assessment return.

Filing the return involves working out the company's profit or loss for Corporation Tax, which is different from the profit or loss shown in its annual accounts, and its Corporation Tax bill.

On the form, box 315 shows profits chargeable to Corporation Tax, which is the company's taxable total profits. An X in box 80 indicates that accounts are being submitted for the period the return relates to. Other boxes are marked with an X to show which supplementary pages are included, such as CT600F for Tonnage Tax. Boxes 595, 600 and 605 record tax already paid and not already repaid, tax outstanding, and tax overpaid including surplus or payable credits. ^[2]

Filing the return and annual accounts together is possible with some of the commercial software HMRC lists. ^[3]

Penalties when the return is late

Penalties build up the longer the return is late: £200 after 1 day, another £200 after 3 months, and another 10% of any unpaid tax after 12 months. At 6 months, HMRC will estimate the Corporation Tax bill and add a penalty of 10% of the unpaid tax. If the return is late 3 times in a row, the £200 penalties are increased to £1000 each.

When a return is 6 months late, HMRC will write stating how much Corporation Tax it thinks the company must pay, which is called a tax determination. A tax determination cannot be appealed against. The company must pay the Corporation Tax due and file its return, and HMRC will recalculate the interest and penalties to pay.

Appealing a late filing penalty

A company with a reasonable excuse can appeal against a late filing penalty online. The Company Tax Return must be filed before the late filing penalty is appealed.

The appeal needs the company's Unique Taxpayer Reference (UTR), the date on the penalty notice, the penalty amount and the end date of the accounting period the penalty is for, along with an explanation of why the return was not filed by the deadline. The form has to be completed in one go, as it cannot be saved and returned to, and it is then printed and sent to the address on the form.

Correcting a return after it has been filed

Changes, known as amendments, must usually be made within 12 months of the filing deadline, either through commercial software or by writing to or sending a paper return to the Corporation Tax office. HMRC may check a return for errors and may charge a penalty for errors.

More than 12 months after the filing deadline, a company that has overpaid Corporation Tax may still be able to claim it back, and it may need to check whether to claim overpayment relief. A company that has underpaid Corporation Tax should tell HMRC using the online disclosure service as soon as possible.