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What is Corporate Tax 

In the UK, all companies are required to pay their tax, known as Corporation Tax or Corporate Tax, on their income and assets. A company tax return (CTR) must be made on a yearly basis, with an optional quarterly or monthly payment option. Corporations and limited companies in the United Kingdom are required to pay their taxes to the United Kingdom government through the Corporate tax System against their net profit. For the financial year 2021 - 2022, it is expected to remain the same as now i.e. 19%. However, from 2023, it is expected to increase to 25%. 

The Corporate Tax Return form is required by the United Kingdom as an application to file corporate tax returns. You must obtain a company tax return form from your local Revenue Department to complete if you like to send tax returns manually. You can also send your corporate tax returns to HMRC using their online service. You have to submit your Company Tax Return for each financial year. When the time comes for your Corporate Tax Return to be processed, your Corporate Tax Return is sent directly to the Revenue Department.

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The Corporation Tax Return is used to calculate your tax liability and to report the amount of tax you have to pay. The corporation tax return calculates your profit and losses. It reports the payable tax on income and capital. It also reports all the payments made by you to the Revenue. The Corporation Tax Return is a detailed document and is the only way to see the amount of corporation tax you owe, as well as the amount that you would owe if you didn't file the Corporation Tax Return.

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How To Send Corporate Tax Returns 

You are required to pay your corporate tax nine months and one day after the end of your accounting period. The posting period is usually your fiscal year, but you can have two posting periods in the year you founded your business. This applies if your taxable profit is £1.5 million or less. If it is above £1.5 million, then you must pay your tax in installments.

However, above £20 million of taxable profit, a different set of rules applies.

If you can demonstrate that you could not afford the amount you owe, then you may be able to negotiate a lower tax liability and still file the Corporation Tax Return. If you are an unrepresented company, then you should send your Company Tax Return to HMRC and accounts to Companies House at simultaneously.  

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You can pay your corporate tax by:

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• Online or telephone banking

• CHAPS

• Bacs

• Debit card          

• Credit card (1.5% charge)            

• Existing Direct Debit       

• New Direct Debit            

• At your bank or building society

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Before sending your tax returns online, you should prepare your company’s annual accounts. They must be ‘balanced’, meaning your total assets should match what you owe. You will also need you’re Government Gateway user ID and password as well as the Companies House password and authentication code (only if you are filing your accounts with Companies House simultaneously).

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The deadline for corporate tax returns is 12 months after the end of the accounting period it covers.

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For those who have been a resident of the United Kingdom for six months or more, and who do not live in an EU member state, they are eligible to apply for a Company Tax Reduction Certificate. However, there are strict eligibility requirements and a person who applies for a Company Tax Reduction Certificate will not automatically receive it.

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Business owners may be eligible to take the annual Self-Assessment tax relief course. A professional accountant will be able to guide you through this process, and can also provide advice on how to prepare your Company Tax Return. The purpose of this course is to help business owners to understand the process of taking their annual Company Tax Return and how it relates to their particular circumstances.

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Another way that a company can reduce its tax liability is by taking advantage of an Individual Savings Account. This is available to almost anyone and is an ideal way for business owners to save money in an easy and affordable manner. An Individual Savings Account will allow a business owner to take out a loan from a bank account and pay off a portion of their income tax.

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There is also the option of making 'contribution' tax relief claims, where the amount paid towards a certain expenses, such as the cost of taking out holiday insurance or travel insurance for example, is deducted from the amount paid in company tax.

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Some Important Facts about Corporate Tax

All individual income tax returns must be filed, along with corporation tax returns. There are many different types of personal tax returns, such as: self-assessment and employee forms of return; married couples and individuals; individuals with no dependents and children; pensioners; self-employed people; and tenants and landlords. All personal returns will be very detailed and must be verified by a professional tax professional.

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