Every business needs to pay its corporation tax. But before all that, you have to work on your company tax returns. Even though both corporation tax and company tax returns have different deadlines, business owners make it a habit to do them at the same time. That’s because you usually need to complete your company tax return to know whether there’s a corporation tax bill to pay. And while some business owners do the filing themselves, many still choose to hire a service or an accountant to do it for them, such as Taxopia.
Understand What a Company Tax Return Is
Filing company tax returns is when you report all your spending, corporation tax, and profits due to HMRC. It involves completing a CT600 form. You need to submit a financial report with calculations that show how much you owe in tax. You will know when you need to file your company tax return when your company receives a notice to deliver a company tax return from HMRC. Even though your company experiences a loss or if you don’t have a corporation tax to pay, you still need to file.
What is a CT600?
The company tax return is also called a CT600, which will include standard company information. You still need to do some complex calculations. The calculations will depend on your company, which will most likely include turnover, income (including profits, property income, & trading losses brought forward), chargeable gains, profits before deduction and gains, tax relief and reductions, and so much more. The computations part of the company tax returns must be in the Inline eXtensible Business Reporting Language (iXBRL) format. There’s a CT600 guide that will help small business owners out.
The Penalties for Filing Company Tax Returns Late
Like everything else, there will be fines when you file your company tax returns late. It depends on your country or state. For example, you’re one day late for filing your company tax returns. Then you need to pay $100. If you’re three months late, then you’ll have a $1000 penalty. If you’re six months late, then the HMRC will have to estimate your corporation bill and add 10% of the bill as a penalty. If you’re late 12 months and more, you’ll have a 10% tax liability. So you must file your company tax returns right away.
Final Thoughts
If you’re a small business model that’s learning how to file your company tax returns, Taxopia has you covered. Visit their website, and they’ll help you find a cheap solution to comply with annual business tax and accounting lodgements.
