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 corporation 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 normally only carry back losses for 12 months and taxable losses not carried back are carried forward to be offset against future profits.

The government have provided a temporary extension to the loss carry back rules for accounting periods ending between 1 April 2020 and 31 March 2022. The carry back period has been extended to three years with losses required to be set against profits of most recent years first before carrying back to earlier years. This is an extension of two years.

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 this may change from 1 April 2023 depending on the levels of profit made by a company. The corporation tax rate will be increased to 25% for companies that make profits of over £250,000. Companies with profits of £50,000 or less will continue to pay Corporation Tax at 19%. Companies with profits between £50,000 and £250,000 will pay tax at the main rate reduced by a marginal relief providing a gradual increase in the effective Corporation Tax rate.

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

Any views or opinions represented in this blog are personal, belong solely to the blog owner and do not represent those of Plus Accounting. All content provided on this blog is for informational purposes only. The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site.

Originally Posted: 29 October 2018

Last Updated: 8 September 2021