What are company tax returns?
Company tax returns are documents used to disclose your firm’s profits and losses for the tax year. It differs from a self-assessment tax return for individuals rather than businesses, although if you are a corporation president, you must also file one of them.
Corporations use tax returns to determine the amount of tax they owe on their profits. Even if your firm produces no profit, HMRC requires you to file a corporate tax return.
What types of tax returns should be filed?
To continue doing business, a company must file a variety of documentation. One of the most evident is your company tax return. Your corporation tax is calculated based on your company’s profits or expenses.
Keep in mind that this is independent of your annual return, or “confirmation statement.” An annual account is a yearly check to ensure that all of the information that Companies House has about your company is proper.
Furthermore, as a company director, you will be required to complete your self-assessment tax return. Self-assessment returns determine how much tax you owe individually, and they are different from your company’s returns. Self-assessment is a significant topic that frequently leads individuals to pay too much tax and request a tax refund.
When should a firm file its company tax returns?
When you form a private company, you will be given deadlines for submitting yearly accounts to Companies House and a business tax return to HMRC. The period included by your company tax returns cannot exceed 12 months; therefore, if you have been actively trading for a longer period, you may need to file two tax returns to cover the time of your first accounts. If you do, you will also face two payment deadlines. In subsequent years, you will typically file only one tax return.
Your company tax returns must be submitted to HMRC within 12 months of the end of the “accounting period” (often the entire tax year). If you fail the cut-off date, the fines begin at £100 and increase from there.
Because not all organisations’ accounting periods correspond to the tax year, there is no set target date that all businesses must meet. Whichever accounting period you employ, you must file your company’s tax return within a year after its end.
Will HMRC notify me about the need to file a tax return?
HMRC actively sends a “notification to deliver a company tax return” to every UK limited company. You ought to get this paperwork approximately 3–7 weeks before the conclusion of the fiscal period.
Never disregard an HMRC request for a tax return, either for a corporation or yourself. Failing to meet a filing or payment deadline can result in penalties and fees, even if you believe it was a mistake.
What are the advantages and disadvantages of a limited company?
Many self-employed people choose to form limited companies.
Benefits:
1. They minimise the amount of money you can lose if everything goes wrong.
2. They can help you save money on your taxes.
3. Establishing this method brings some prestige. It demonstrates that you take your business seriously, which can be useful when trying to impress lenders or clients.
Drawbacks:
1. You are giving up some anonymity.
2. There are setup charges.
3. You’re also increasing your financial workload. For instance, because your company’s money is not precisely “yours,” you must file different tax returns for it and your own.
What documents should I keep?
Being a corporate director, or simply an employee, entails a significant amount of documentation. Taxed award programmes, redundancy payouts, and a variety of other perks all require record-keeping. Keep track of any important expenses you’ve incurred. You could potentially be able to use them to reduce the tax you owe.
HMRC anticipates that you report all benefits you have received, including Jobseeker’s Allowance, Sickness Pay, and Mandatory Maternity Pay. You should also keep track of any money or benefits you receive from employee share plans. It’s each component of the overall picture of your finances that the IRS wants to see.
Do I need a registration for self-assessment?
Operating a limited company entails submitting a large amount of documentation to HMRC and Companies House. As part of this, directors must file annual self-assessment tax returns. Moreover, the self-assessment system includes many twists and turns, which might be confusing for those who are unfamiliar with it. If you’re uncertain of your footing, call RIFT for professional assistance.
Can I be assisted with my company tax returns?
Undoubtedly! Low Cost Accounts have experience limited company accountants. We can provide advice on how to start your business and even act as your official HMRC representative. Furthermore, our specialised tax return service can resolve all of your business and personal tax return issues. We will save you money while keeping you on the correct side of HMRC.
Low Cost Accounts: Company Tax Returns Strategic Guidance
Low Cost Accounts specialises in providing comprehensive support for company tax returns. Thus, with our expertise and experience, we guide businesses through the complexities of tax compliance with ease. Transitioning from assessment to filing, we ensure accurate calculations and timely submission, minimising the risk of errors or penalties. Moreover, our proactive approach includes identifying potential tax-saving opportunities and maximising deductions, ultimately optimising the company’s tax position. Hence, with Low Cost Accounts, businesses can navigate the intricacies of company tax returns confidently, freeing up valuable time and resources to focus on core operations and strategic growth initiatives.
