Can a UK company apply for a corporation tax extension?

A company is required to file its corporation tax return within 12 months after the end of the accounting period that it covers. A penalty will be payable if the corporation tax return is filed late.

Small companies normally have to pay any corporation tax due within 9 months and one day after the end of the accounting period.

Can a UK company get a tax refund?

A company can receive a tax refund if it has made a taxable loss in the current year but made a taxable profit in the previous 12 month period.

A company can opt to carry back losses after first offsetting them against other gains or profits in the same period and will receive a refund of some or all of the tax paid in the prior period.

A company can only carry back losses 12 months and taxable losses not carried back are carried forward to be offset against future profits.

Can you pay UK Corporation tax in installments?

Companies with taxable profits of up to £1.5m are required to pay any corporation tax due within 9 months and one day of the end of the accounting period.

If the company cannot pay its corporation tax by the due date it will be necessary to contact HMRC as soon as possible to set up a payment plan. HMRC may then allow the company to pay in installments. The company will have to pay interest on any late payments.

A company with taxable profits of more than £1.5m must pay its corporation tax in 4 installments which, for a standard accounting period of 12 months, are as follows:

  • 6 months and 13 days after the first day of the accounting period
  • 3 months after the first installment
  • 3 months after the second installment (14 days after the last day of the accounting period)
  • 3 months and 14 days after the last day of the accounting period

The £1.5m limit may be reduced if the company is a member of a group or has other companies associated with it.

How does UK Corporation tax work?

Companies have to pay corporation tax on their taxable profits.  Taxable profits may be different to the profit shown in the financial statements. The current rate of tax payable is 19% although it is expected that this will be reduced to 17% for the year starting 1 April 2020.

A corporation tax return has to be filed within 12 months of the end of each accounting period.

What is a notice to deliver a UK Company Tax Return?

A notice to deliver a Company Tax return is received from HMRC and informs the company that it must file a company tax return. A return is still required even if the company makes a loss or has no corporation tax to pay.

The deadline for a corporation tax return is 12 months after the end of the accounting period which it covers.

Author: Chris Morey, Director, Plus Accounting

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