Companies are responsible for assessing their own liability to corporation tax and for ensuring that all the money which is due is paid on time.
Most companies have to pay within nine months and one day of the end of their accounting period
- This rule applies to small and medium-sized companies (ie those with profits of up to £1.5m).
- Tax must be paid in full at the due date, whether or not HMRC is challenging the figures shown on the return.
- Interest is charged on late payments.
Larger companies have to pay the tax due in quarterly instalments
- The first instalment has to be paid six months and 14 days after the end of the preceding accounting period (ie halfway through the accounting period to which the payments relate).
- Two further quarterly payments then have to be made with the balance payable within three months and 14 days of the end of the accounting period.
- Companies with profits in excess of £20m will be required to pay their corporation tax bill in instalments on the third, sixth, ninth and 12th month after the end of their accounting period from April 2017.
- Special rules apply where the accounting period is not 12 months.
All companies have to submit their corporation tax return online
- The corporation tax return must be made within 12 months of the end of the period of account. There are penalties for failing to file on time.
- If HMRC disputes any of the figures in the corporation tax return, the company may face an enquiry or a demand for extra tax. The inspector normally has 12 months from the date the return was filed make enquiries.
- Company tax returns, corporation tax and related penalties and interest must be submitted and paid electronically.
HMRC assumes that you will employ a qualified accountant or tax adviser
- Your accountant or adviser can deal with correspondence and help you with corporation tax.
- HMRC will send you the appropriate forms as soon as your company is registered with Companies House.
- Your local tax office can assist with minor problems.