A limited company must pay Corporation Tax on any profit it has made. Not only that, it’s up to the company to calculate how much tax is due. Corporation Tax is always calculated on historical data; the amount a company needs to pay is calculated on the profit made in the company’s previous tax year. The tax year is sometimes known as the accounting period.
The Corporation Tax return, showing the amount of tax the company has calculated it owes, must be submitted to HMRC within twelve months of the end of the tax year the calculation is for (the accounting period). As you can imagine, the Taxman gets vexed if this isn’t done on time and will fine a company for late or incomplete returns.
Once the tax return has been submitted there’s then the matter of paying the tax due. This tax must be paid to HMRC nine months and one day after the end of the company’s tax year. Yes, you read that correctly. You have a year to submit a tax return but only nine months and a day to pay any tax owed. As if that wasn’t daft enough, you also need to take into consideration that you must submit your company’s accounts to Companies House within nine months of the end of your company’s tax year. Read through this paragraph again and you’ll realise that the twelve months given to submit accounts to HMRC is a nonsense as you’ll have had to submit the accounts to Companies House three months earlier – and pay any tax due three months earlier… give or take a day.
Sensible isn’t it? It so very easy to get yourself tied up in knots about the dates!
Keeping up to date with tax rates, calculations and submissions can be stressful and time consuming. The time taken invariably takes the business owner away from other aspects of running their company and the whole process probably frustrates them massively! We don’t think this is an efficient use of a company owner’s time and, after all, if they’d wanted to be an accountant...
Our bean counting minds love all this sort of stuff though, so we’re more than able to make all the calculations for you. However, we won’t just do a simple calculation because, whilst we’re all for paying any tax that’s legally owed, we hate the thought of paying tax when you don’t need to; that is simply horrid.
In a nutshell; we’ll calculate what your company owes, submit the return on time and let you know when and what you need to pay. On top of this, we’ll make sure that your company operates in the most tax efficient way possible and pays only the taxes absolutely necessary.