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What Is A Company Tax Return

What Is A Company Tax Return

For owners navigating the complex world of financial responsibilities, understanding company tax returns is paramount.

Whether you’re a seasoned entrepreneur or are new to the business world, understanding the ins and outs of this financial document is essential for both compliance and strategic financial planning.

Throughout this blog, we will explore what company tax returns are, when to file your returns and more. For more information, read on.


What is a Company Tax Return?

A Company Tax Return is a formal document submitted to Her Majesty’s Revenue and Customs (HMRC) that outlines a company’s taxable profits and other relevant financial information. It is a fundamental aspect of fulfilling a company’s legal obligations and ensuring accurate taxation.


Do I Need to File a Company Tax Return?

In the UK, every limited company is required to file a Company Tax Return with HMRC. This includes companies that are trading as well as those that are non-trading or dormant.

Even if your company incurs losses or is involved in tax-exempt activities, it is still obligated to submit a tax return. Late tax returns can result in fines or penalties.


When Should I File a Company Tax Return?

The deadline for filing Company Tax Returns is a crucial element of compliance. Generally, companies must file their tax returns within twelve months of the end of the accounting period.

For example, if your company’s financial year ends on 31st December, the deadline for filing the Company Tax Return is 31st December of the following year.

However, it’s not just about filing on time; it’s also about paying any tax owed promptly. There is a separate deadline for paying corporation tax, which is usually nine months and one day after the end of the accounting period.

Understanding and adhering to these deadlines are crucial to avoiding penalties and interest charges. Failure to meet these deadlines can result in a penalty for late filing.


What Information is Included?

A company tax return is a comprehensive document that includes various details about a company’s financial activities.

The profit and loss statement section outlines the company’s income, expenses, and profits or losses for the accounting period. It provides brief information on the financial performance of the business.

The balance sheet details the company’s assets, liabilities, and equity at the end of the accounting period. It gives a clear picture of the company’s financial position.

Tax calculations show how the company’s taxable profits were reached. This involves applying tax rules and adjustments to the profits disclosed in the financial statements.

Companies can claim capital allowances on certain assets, such as machinery or equipment. This section outlines the allowances the company is entitled to claim, reducing its taxable profits. Details of any tax relief or credits the company is eligible for are also included.

For smaller companies, a director’s report may be required, providing additional details about the company’s activities. This report is usually included in the tax return.


What Are the Penalties Associated With Late Filing?

Understanding the consequences of non-compliance is as important as grasping the contents of a Company Tax Return.

HMRC imposes penalties for late filing, late payment of tax, and inaccuracies in the return. Penalties can accrue daily, so it’s crucial to adhere to deadlines and ensure the accuracy of the information provided.


How Can You Submit a Company Tax Return?

In today’s society, the submission of Company Tax Returns is mostly done online. Companies can use HMRC’s online filing service or opt for commercial software.

Before filing, it’s imperative to gather all relevant financial documents, ensure the accuracy of the information, and have a clear understanding of the company’s tax obligations.


Seek Professional Advice

Navigating the complexities of Company Tax Returns can be challenging, especially for those who have a background in finance. Many businesses choose to get help from accountants or tax professionals to ensure accuracy and compliance.

Professional advice not only helps in meeting legal obligations but can also identify opportunities for tax planning and optimisation.

While Company Tax Returns are primarily about compliance with legal obligations, they also offer an opportunity for strategic financial planning.

By thoroughly understanding the business’s financial health, companies can identify areas for improvement, assess the impact of different financial decisions, and strategically plan for tax liabilities.


Contact LJS Accounting Services for Help And Support

Company Tax Returns play a major role in business finance, ensuring compliance with legal obligations and providing a comprehensive overview of a company’s financial activities.

Navigating the complexities of tax returns requires a clear understanding of deadlines, components, and potential penalties for non-compliance.

Seeking professional advice can be invaluable, not only for meeting legal requirements but also for strategic financial planning and optimisation.

Here at LJS Accounting Services, we provide VAT and bookkeeping services to ensure that you stay on top of your tax and paperwork. We understand how time-consuming and stressful it can be to keep up with paperwork and tax payments, which is why we are here to help.

For more information on the services we offer or to speak to a member of our team, don’t hesitate to contact us today. We are more than happy to help.

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Need to talk to someone? Get in touch with one of our consultants today and we will be happy to help.
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