How to file company tax returns in the UK

What is a company tax return?

A company tax return is a form, plus supporting documents, that limited companies use to tell HMRC how much corporation tax they owe.

The form is called CT600 and you may see ‘CT600’ used interchangeably with ‘company tax return’. You might also see the expression ‘corporate tax return’, but this is incorrect – ‘company tax return’ is the proper name.

In reality, the CT600 form is just one part of your company tax return, which also includes:

• Your company accounts

• ‘Computations’ that show how your taxable profits were calculated

• Supplementary pages relating to any specific reliefs or claims

Who needs to file a company tax return?

All limited companies must file a company tax return after each accounting period, unless HMRC has said that it views them as dormant.

You might also have to file a company tax return if you make a profit running a sports club or voluntary group – even though it isn’t technically a company.

If HMRC thinks your business has corporation tax to pay, it will send you a ‘CT603’ letter – also known as a ‘Notice to deliver a Company Tax Return’.

However, even if you don’t receive a CT603 in the post, you must still tell HMRC about any tax you think you have to pay.

If you don’t, you could receive a penalty – the severity of which will depend on whether HMRC thinks you failed to notify them deliberately or by mistake.

Do sole traders have to file a company tax return?

No. Sole traders and partnerships – which are essentially a collection of sole traders – do not pay corporation tax. Instead, they pay income tax on their share of the business earnings via self-assessment.

Do dormant companies need to file tax returns?

No. Once you’ve told HMRC your company has stopped trading and isn’t receiving any income from other sources, you won’t need to file another company tax return – unless HMRC asks you to.

HMRC can also decide it thinks your company has become dormant. If this happens, they’ll send you a letter stating that you no longer have to pay corporation tax or file a company tax return.

Do I still need to file a tax return if my company made a loss?

Yes. You must file a company tax return as long as your company is ‘active’ – ie. trading or receiving income from other sources. This applies even if the company made a loss in the accounting period.

Information needed to file a company tax return

The CT600 company tax return form is only 12 pages long, and many sections are relevant to certain industries or grouped companies only.

So, if you’re running a small limited company by yourself, you’ll be able to skip through quite a lot of the form – focusing mostly on the first sections.

Here’s the key information needed to file your company tax return online:

• Login details – you’ll need your Government Gateway user ID and password, plus your Companies House password and authentication code, to file your company tax return and annual accounts online at the same time.

• Company accounts – also known as ‘statutory accounts’, these must contain: a balance sheet, profit and loss account, notes about the accounts, and a director’s report. Accounts must meet certain minimum standards and be submitted in iXBRL (Inline eXtensible Business Reporting Language) format.

• Company information – the first section of the CT600 form asks for: your company name, company registration number, tax reference number, and the type of company you run.

• Return information – the second section of the CT600 asks for information about the return itself, including whether you’re: filing for just one accounting period or multiple, using estimated figures, attaching your tax computations and accounts, and enclosing any supplementary pages.

• Tax calculation – this section of the CT600 form is about the tax you think you owe and how you arrived at that figure. This section asks for your: turnover, income, chargeable gains, profits, deductions and reliefs, marginal relief entitlement, and final corporation tax calculation.

• Computations file – the profit figure listed in your company accounts is likely to be different to the final ‘taxable profit’ figure for corporation tax purposes that you put on your CT600. You must submit an iXBRL computations file that shows how and why these figures differ.

After the tax calculations section, form CT600 deals with reliefs and allowances for specific industries and activities, as well as losses, repayments and overpayments.

You only need to complete these later sections, and submit supporting supplementary pages, if they’re relevant to your calculations.

How to file a company tax return

Almost all limited companies must file company tax returns online, at the same time that they file their annual accounts with Companies House.

It is still possible to file a paper company tax return, but only if you have one of HMRC’s ‘reasonable excuses’ for doing so – or if you want to file in Welsh.

When are company tax returns due?

Your company tax return is due no later than 12 months after the end of the accounting period it relates to.

You get more time to file the return than you do to pay the corporation tax detailed within the return (you must pay within 9 months and 1 day).

Filing your first set of accounts and company tax return

Because of the way Companies House assigns incorporation and ‘accounting reference’ dates to new companies, your first set of annual accounts will probably cover a period of more than 12 months.

However, a company tax return can cover up to 12 months only. So, for your first year in business, you might need to submit two tax returns.

After this first year, your financial year and accounting periods align – and you’ll only have to submit one tax return per company accounts

What are the penalties for filing late?

If you haven’t filed your company tax return with HMRC by the deadline, you will receive a £100 fine the next day.

If you still haven’t filed 3 months later, another £100 fine is added.

After 6 months, HMRC will estimate your corporation tax bill and fine you 10% of that amount on top of the earlier fines.

After 12 months, you’ll be fined another 10% of the estimated bill.

If your company files its tax return late 3 times in a row, the £100 late-filing penalties are increased to £500.

Wrapping up

It’s perfectly possible for limited company owners to understand how to file a company tax return in the UK – and many choose to tackle it themselves.

However, the calculations for corporation tax and the filing system itself can get complicated. Accountants are experts in these matters, and you may want to consider hiring one to calculate your bills and manage your returns.

Thinking about starting a limited company? Register your company with us to save £35 compared with going direct via Companies House – and get a free business bank account at the same time.