If you have recently started operating as a\u00a0limited company<\/a>, corporation tax is going to be a huge aspect that will need to be taken care of for your continued success and safety. It\u2019s simple to get to grips with everything you need to complete and the HMRC makes the process of signing up, paying and keeping track of your records as easy as possible. You\u2019ll be asked to provide:<\/p>\n\n\n\n There is a three-month deadline to register for corporation tax, which will begin on the day you start doing business. Your company director should be in charge of the company tax return, including filing and payments. If they aren\u2019t confident in doing this, you can hire an accountant<\/a> instead \u2013 although you should both be aware that the legal responsibility will remain with your director if any problems arise.<\/p>\n\n\n\n The standard rate for this kind of tax in the UK is currently 19%, and this was set for 2 years for all business profits. It is going to increase to 25% in 2023, so this is worth keeping in mind. While it may seem like a big leap, the truth is that it\u2019s still relatively low compared to previous years. In fact, it was set at 28% back in 2010.<\/p>\n\n\n\n The good news is that there are some tax reliefs that you may be able to take advantage of. There will be conditions and requirements that have to be met, but a good accountant can help and advise you on what your options are. The potential ones pertaining to corporation tax include:<\/p>\n\n\n\n It\u2019s important for businesses to know exactly when the deadline for filing for corporation tax is \u2013 but there\u2019s a catch. This isn\u2019t the same deadline as it is for other taxes. In fact, you will need to file it before your company tax return.<\/p>\n\n\n\n Furthermore, your corporation tax accounting period will determine the deadline you face. Be sure to do your research, so you don\u2019t miss it (for reference, you will have nine months and one day from the end of your specific accounting period and the previous financial year). There will be penalties, and fees can get worse if things go unpaid for too long. The payment method you choose may have different processing times, and this could result in you making a late payment. For your reference:<\/p>\n\n\n\n There may be times when you overlook paying your corporation tax. If this happens, you may find yourself on the end of a late fine. These are:<\/p>\n\n\n\n Interest will be applied to the amount owed, and penalties or surcharges may be added also. Failure to pay can result in:<\/p>\n\n\n\n The HMRC<\/a> may even shut down your business entirely or begin proceedings to bankrupt you if you don\u2019t have a reasonable explanation for ongoing late payments \u2013 or if you try to avoid paying altogether. Things can and will escalate in the latter instance, and avoiding your taxes could land you in prison if things go too far. If you have any issues paying any bills to the HMRC, honesty is always going to be the best policy, as there may be concessions that can be made in extenuating circumstances.<\/p>\n\n\n\n There can also be issues if any errors are found within your company tax return. Accidents can happen and if you\u2019re honest, you may get off without a fine, but these can go to as much as 30% of your tax bill. If HMRC identifies the mistake, you should expect anywhere between 15% and 30%.<\/p>\n\n\n\n It\u2019s extremely important to understand that if an error is discovered that HMRC deems to be deliberate, you could be facing some serious consequences \u2013 especially if attempts were made to hide it. If you own up when notified, you\u2019ll likely face 30% to 100% of your tax bill being fined, but it will be higher, at 50% to 100% if you don’t.<\/p>\n\n\n\n The good news is that changes can be made to your company tax return within 12 months of the filing deadline, so genuine accidents don\u2019t have to be costly if they\u2019re caught soon enough. They will need to be notarised and will show up in the final filing, so be transparent about your amendments wherever possible. <\/p>\n\n\n\n Hiring a team like ours here at Workhy<\/a> will give you the helping hand you need to ensure your company setup goes smoothly. Our highly skilled experts can offer additional services regarding taxation and financial issues too, so don\u2019t hesitate to reach out for all your business needs.<\/p>\n\n\n\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\tThe corporation tax rate in the UK<\/strong><\/h2>\n\n\n\n
When is corporation tax due and how to pay it?<\/strong><\/h2>\n\n\n\n
Late filing penalties for corporation tax<\/strong><\/h2>\n\n\n\n
Workhy is your trusted assistant when setting up your UK company<\/strong><\/h2>\n\n\n\n
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