With corporation tax reliefs and rates changing on an annual basis, it’s important to make the most of all of the exemptions, allowances and deductions available for tax returns calculations.
Our specialist company tax accountants cover all aspects of technical tax guidance your small business may need. We spend time with you to understand your circumstances, minimising tax and the best way to structure your business for growth and risk mitigation.
Filing a corporation tax return
All active companies must file a corporation tax return to HMRC each year to work out how much corporation tax is owed.
But there are plenty of reliefs that can help reduce your bill.
What is a corporation tax return?
A corporation tax return is based on the profit or loss you have made and any expenses or allowances claimed to calculate your corporation tax bill.
The return and payment must be submitted to HMRC.
Your corporation tax return takes the profit or loss you have made in your accounts to work out how much you owe HMRC in corporation tax.
The corporation tax rate is currently 20 per cent but is due to fall to 17 per cent by 2020.
Deadline to file your corporation tax return
Businesses typically need to file a corporation tax return 12 months after the end of their accounting period.
An accounting period is set by HMRC and the taxman will inform you of your deadline.
What is in a company tax return?
Your corporation tax return incluces details of your profit or loss from your statutory accounts to work out how much corporation tax is due.
The annual accounts are useful as the balance sheet and profit and loss report provide data that will be used in the corporation tax return.
But the profit you make is not necessarily directly linked to the amount of tax your company will pay as there are several reliefs, allowances and expenses you can claim to reduce the bill
First there are allowable expenses such as business travel or stationery that you can claim for.
Businesses can also carry forward losses from previous years to set against future profits.
You can offset any of this spending against your tax bill. So if your profits were £100,000 one year but you spent £20,000 on equipment, you would only pay tax on £80,000.
You need to include all calculations for these expenses in your return.
It can be complicated to work out the reliefs you are entitled to and to make sure you report the right information to HMRC.
Corporate tax rates and breaks
Small businesses benefit from lower rates of corporation tax than larger corporations and several additional tax breaks for small businesses have been created in recent budgets – a trend which looks set to continue. Staying on top of the changing legislation and carefully considering other personal income and pension arrangements, can lead to some significant tax savings, especially if there is scope to spread out earnings over a number of years.
Company accounts filed on time and correctly adjusted
There’s always a balance for the small business between trying to save money on professional fees as against having the assurance that you are getting the level of skill and experience to get things done in the most advantageous way.
All our company tax filings are checked by senior accountants and, using the best software and internal systems, we remind you and ourselves well in advance of any filing deadlines. This ensures we get the right paperwork from you to ensure all adjustments and allowances can be included in good time before your tax filing deadline.
If this sounds of interest for your small business, why not get an instant quote?
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