Corporation tax self assessment requires companies to work out their own tax bills as part of their return, and to account for the 'self-assessed' liability to corporation tax.
The tax return
The corporation tax return (CT600) has to be accompanied by accounts and computations, which form part of the return. The return has certain supplementary pages, and some companies have to include extra information such as international interests and loans to shareholders.
Failure to file on time
An automatic penalty of £100 will be imposed if you file your return more than twelve months after the end of the accounting period. This rises to £200 if the failure to file continues beyond a further three months.
Extra Statutory Concession ESC B46 says that a return will not be treated as late if it is received by the end of the last business day within 7 days after the filing date.
In the absence of a return, HM Revenue & Customs may make a determination of the tax to the best of its information and belief. No appeal can be made and the tax must be paid. The determination can be displaced only by filing a completed return and self assessment.
Amending returns
A company has up to twelve months from the statutory filing date to amend its return. HM Revenue & Customs can correct obvious errors or omissions no more than nine months after the filing date.
Enquiries
Enquiries are subject to rules similar to those applying to income tax. If HM Revenue & Customs does not start an enquiry within the prescribed time (normally one year from the date the return is filed), the company's self assessment becomes final.
Keeping records
The Companies Act already requires registered companies to keep accounting records. For most companies in most situations, this is enough to satisfy HM Revenue & Customs record keeping requirements, so long as they are kept for six years from the end of the accounting period.
Corporation tax payments
There are arrangements under which a company with taxable profits over £1.5 million pays its corporation tax by instalments. Most companies are too small to be affected, so will carry on paying their tax in one sum nine months and one day after the end of the accounting period.
Interest
Interest will automatically be payable on late paid tax and penalties, or receivable on overpayments of tax.
