Corporation Tax Self-Assessment
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To ensure avoidance of penalties, companies should notify HM Revenue &
Customs within 3 months of commencing trading which is normally done by means of
completing form CT41G.
Filing Dates of Returns
The corporation tax self-assessment return (CTSA) must be submitted to HMRC
along with the accounts and tax computations, although it is possible to file
all this information online through the HMRC website. The filing deadline for
the CTSA return (plus accounts and tax computations) is normally 12 months from
the end of the accounting period. If the return is late there are penalties as
- Up to 3 months late - £100 (increasing to £500 for a third consecutive
- Over 3 months late - £200 (increased to £1000 for a third consecutive late
- 18 to 24 months late - Extra tax geared penalty of 10% of the unpaid tax.
- More than 24 months late - 20% of the unpaid tax.
Payment Dates For Corporation Tax
This is usually 9 months and 1 day after the end of the accounting period for
small companies. However large companies (£1.5 million of profits) pay under 4
quarterly instalments, that commence 6 months into the accounting period, so
they must use an estimate of their eventual tax liability for the year.
Companies that form a group may fall into the definition of ‘large’ and be
required to pay corporation tax by instalments. Interest runs on late payment.
Companies must also deduct income tax from some payments (such as some
interest payments) and pay this over to HMRC within 14 days of a quarter end.
Quarters end on 31 March, 30 June, 30 September and 31 December, with an extra
return in the period up to the accounting period end if it does not coincide
with these dates.
Time limits for correcting and enquiring into tax returns?
HMRC have 9 months after a return is filed (or an amendment filed) to correct
obvious errors such as arithmetic mistakes. The company can amend the return
with 12 months of the filing date.
With regards to enquires, returns can be selected at random or for a reason
(but HMRC don't have to say which) at any time within 12 months of the due
filing date or if the return was filed late it is from 12 months of when it is
filed plus the period to the next quarter day (31 Jan, 30 April, 31 July, 31
October). Where there is an amendment, the time limit changes to 12 months from
the date of the amendment plus the period to the next quarter day.
However, HMRC can make a discovery assessment if there is a loss of tax due
to fraud or negligence, or if the facts giving rise to the loss of tax only
became known to HMRC after the time limit for opening an enquiry had expired and
they could not reasonably have been expected to be aware of the facts from the
information made available to them at the time. The normal time limit for
discovery assessments is 6 years after the end of the accounting period but is
increased to 20 years in cases of fraud or neglect.
Records must normally be kept in support of the return for 6 years from the
end of the accounting period. The penalty for non-compliance can be as much as
£3000 for each accounting period..
About the Author
Jonathan Amponsah BSc FCCA is a UK Tax Expert and the founding partner of
A M P Associates –
A specialist firm of chartered certified accountants and tax advisers based in
London and Surrey. Jonathan advises on a wide range of business and tax issues
and he is recognized for his proactive and innovative approach to taxation.
Jonathan can be contacted on 0845 009 8845 or email:email@example.com
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Article Published/Sorted/Amended on Scopulus 2008-05-09 00:33:55 in Tax Articles