The corporation tax deadline is the date that catches limited companies out, because it is not the same as the Companies House date and it is not 31 January. For most small companies there are three clocks, and they start from your own year end, not from the tax year.
The three dates
You normally pay the corporation tax nine months and one day after the end of the accounting period. The company tax return, the CT600, is due twelve months after that period ends. Accounts for a private company are normally due at Companies House nine months after the year end. A company with a 31 March year end, for example, pays the tax by 1 January and files the return by 31 March the following year.
Very large companies pay in quarterly instalments instead of one bill. That is unusual for the businesses we work with. If you are not sure which rule applies, the profit level is the test, not the turnover on its own.
What the bill is based on
Corporation tax is charged on the company profits, not on the cash in the bank. The small profits rate is 19% where profits are up to £50,000. The main rate is 25% where profits are over £250,000. Between those figures, marginal relief tapers the rate. If you have more than one associated company, those bands are shared, so the 19% band can be smaller than people expect.
How to avoid a last-minute bill
The useful habit is to look at the likely profit a couple of months before the year end, while you can still time pension contributions, equipment and the split between salary and dividends. Waiting until the accounts are finished means the tax is already fixed.
We prepare the accounts, the corporation tax return and the Companies House filing together. See corporation tax and year-end accounts, or book a free accounting review if you want the dates for your own year end written down.
