What is Corporation Tax?

Before a company can pay corporation tax, they need to work on its company tax return.

A corporate tax return is financial information that all active UK businesses must file with HMRC every year to report their earnings, losses, spending, loans, and other factors deemed relevant to a company’s financial year.

Public and private limited companies, any foreign company with a UK branch or office or a club, co-operative, or other unincorporated association e.g. a sports club are all entities that must pay corporations tax on profits from doing business.

What if I’m a Sole Trader?

If you are a sole trader or a partnership, you only have to pay income tax on the profits of your business, rather than a charge on your company’s profits. This is called a Self Assessment return. Corporation tax only applies to private and public limited companies, therein lies the difference between corporation tax and income tax.

Accounting Period

The ‘accounting period’ for Corporation Tax is the time covered by a company’s Company Tax Return. The deadline for your tax return is 12 months after the end of the accounting period it covers. It may be different in the year the company was set up.


There’s a different deadline to pay your corporation tax bill. It’s usually 9 months and one day after the end of the accounting period.

Make sure you pay in the required time

Failure to meet these deadlines will incur penalties for late filing, which can be drastic for companies. If your tax return is late three times in a row, the £100 penalties are increased to £500 each. If it is six months late, HMRC will write telling you how much Corporation Tax they think you must pay. This is called a ‘tax determination’. You cannot appeal against it.

Make sure you choose the right accountant

This is why it is vital for businesses to get an accountant to prepare and file their tax return properly, and on time. It is important to get an accountant on board well in advance of the deadline to ensure they are completely clued up on all the financial activity within the business in that tax year. This avoids the risk of unbalanced books and errors which could impact a company’s appeal to potential investors.

Why choose SAS Accounts?

At Sandwell Accountancy Services, we ensure everything is done quickly and effectively to meet all deadlines and ensure your annual tax returns are lodged on time. We are based in Sandwell in the Black Country and service businesses and individuals across the West Midlands. With more than 40 years of experience in the industry, our family-run firm is best placed to provide quality, reliable services, every time.

Complimentary services

We also offer some complimentary services, including accurate and reliable bookkeeping – we are happy to balance your books on a weekly or monthly basis – managing payrolls, employee payments, and VAT returns.

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Our reviews speak for themselves, with countless happy clients expressing their satisfaction with our financial assistance on GMB. Check them out here.

Need affordable, accurate help with your corporation tax return? Give us a call today at 01384 569 197 to discuss your needs. Alternately you can arrange an appointment.