(Newswire.net — September 21, 2023) — Any limited company based in the UK must pay corporation tax on its profits which is calculated and paid annually based on your ‘corporation tax accounting period’, which is usually the same as your company’s financial year.
Corporation tax also applies to PLCs, unincorporated associations, and some membership organizations. Calculating and submitting your files, however, can be a long, and time-consuming process. Here are our 7 top tips for calculating and submitting your corporation taxes.
1. Do your research
Recently set up your own business? Not sure where to start? Make sure to take the time and find out exactly what forms you need to fill out and what each document means. This way, you can be prepared for any potential issues that may arise, preventing you from reaching the deadline.
2. Know your deadlines
The deadline for your tax return is 12 months after the end of the accounting period it covers. To keep on top of things, try and start your tax return process early to avoid paying a penalty for late filing.
There’s a separate deadline to pay your Corporation Tax bill, which is typically nine months and one day after the end of the accounting period, so keep this in mind and be prepared.
3. Double-check your figures
We know filing taxes isn’t the most fun task, so you might be rushing to just get it done and out of the way. Inputting the wrong figures, however, can not only result in the process taking even longer, but you may then have to pay more tax than originally stated. If you do make a mistake, you can write to HMRC to get this updated.
4. Use a calculator
Filing your corporate tax return doesn’t have to be a long process. You can use online tax calculators to find out how much corporation tax your limited company will be liable for, which is based on your net profit before taxes. There are plenty of corporate tax calculator tools you can find that can help with complex calculations, saving you time and hassle.
5. Hire an accountant
Don’t have the time? Hire an accountant to take care of the calculations and filing for you. Hiring an accountant can assist with the preparation of company accounts, company tax returns, and tax computations, and will also be able to provide advice on any tax planning areas that may benefit you and your company.
6. Keep receipts organized
As part of filing your corporate tax return, you’ll need receipts for all expenses for the last year. HMRC recommends keeping receipts for all business expenses and sales, including invoices, bank statements, VAT records, credit card statements, PAYE records for staff, personal income takings, and expense receipts. Not keeping these will result in inaccurate figures, potentially leading to higher tax rates.
7. Put the time aside
Leading on from our last point, the deadlines come around very fast; so it’s important to find the time so you’re in the right headspace and can complete your return accurately and on time. Even if you’re a busy one-man band, setting a few hours aside can make all the difference.
Ready to get started?
Finding the time to keep on top of your accounts, hit reporting deadlines, stay updated on new legislation, and complete returns is not easy. Quite often, trying to do all this alongside running your business can lead to costly mistakes and more hassle. However, by keeping our top tips in mind, you’ll be able to streamline your processes, making life easier and stress-free.