| Corporation Tax is a tax on a company's taxable | | | | oil rights in the UK and UK Continental Shelf remain at |
| profit. A company being any limited company whether | | | | 19% for small companies and 30% for larger |
| by shares or guarantee, members clubs and | | | | companies. Interest is charged on late payments and |
| associations, trade and housing associations, | | | | at a lower rate on instalment repayments of |
| co-operative groups. A companay tax return consists | | | | Corporation Tax as is the practice on all late tax |
| of the completed Corporation Tax Return CT600 and | | | | payments. |
| the annual financial accounts and documents which | | | | Accounting Periods straddling 1 April |
| support the tax calculation. | | | | The effective date for changes in the Corporation |
| All companies are required by law to maintain records | | | | Tax rate applicable in recent years has been 1 April |
| of that company's transactions in a manner that must | | | | each year as opposed to the 5 April for |
| be adequate to enable the company to produce an | | | | unincorporated businesses. For companies with |
| accurate Company Tax Return. Company tax | | | | accounting periods that straddle the 1 April separate |
| records must be kept for a minimum of six years from | | | | calculations are required for the period before 1 April |
| the end of the accounting period and longer if the | | | | and after 1 April based upon the number of days in |
| accounts are submitted late or being enquired into by | | | | each accounting period. As a proportion of 365 (366 in |
| the Inland Revenue. Company tax records must | | | | leap years such as 2008) |
| include all original sales receipts and purchase | | | | No Corporation Tax Due |
| expenses. Under Companies Act legislation registered | | | | Companies are required to advise HMCE by either |
| companies must also keep accounting records. | | | | submitting a company tax return or informing them by |
| Companies are responsible for calculating their own | | | | completing the HMCE form for this purpose or at the |
| corporation tax liability and paying the corporation tax | | | | very least returning the payment slip marked "NIL due". |
| without prior assessment by the Inland Revenue. | | | | All communications should state the corporation tax |
| Companies which fail to deliver their tax return by the | | | | payment reference which can be found on the |
| statutory fling date which is normally 12 months after | | | | payment slip. This reference number is specific to |
| the accounting period are liable to penalties. An | | | | each accounting period and must be quoted |
| accounting period normally being 12 months - can be | | | | accurately. |
| shorter but never longer. Should a company submit the | | | | Filing Corporation Tax Return Online |
| CT600 Corporation Tax return form without the | | | | Most companies and their agents can file company |
| accounts then it is treated as not having submitted a | | | | tax returns online. The computations, financial accounts |
| tax return form. | | | | and other supporting documentation must be sent in |
| Current Company Tax Return Forms | | | | PDF format with some approved software products |
| The latest version of the CT600 form for 2007 has | | | | being sent in XBRL format. Filing the corporation tax |
| been available for download from the Inland Revenue | | | | return online is faster, often more convenient and can |
| website since 31 August 2007. The Corporation Tax | | | | be done 24 hours a day while the HMCE software |
| Return Form CT600 Version 2 contains two small | | | | calculates the tax liability. Using the CT Online service |
| changes from the previous 2006 version. CT600 | | | | also allows the company's tax position to be viewed |
| (short) for small companies has an additional box on | | | | including any interest or penalties that have been |
| Page 1 so that a company which is a member of a | | | | charged. Company details such as telephone, fax, |
| group other than a small group can identify itself. The | | | | addresses and email addresses can be changed and |
| same additional box is on CT600 plus a new box on | | | | agent details can be added or changed. Authorised |
| page 3 of the 8-page form so that a company with | | | | agents can also view client company corporation tax |
| ring fence profits can show the ring fence profits | | | | positions and liabilities. |
| included in its figure of total profits. There are no | | | | Inland Revenue Enquiries into Company Tax Returns |
| changes to other forms in the CT600 series at | | | | Enquiries into Company Tax returns are governed by |
| present and all the CT600 Supplementary Pages | | | | rules and codes of practice. HMCE have at least 12 |
| published in 2006 remain valid and will probably remain | | | | months from the statutory filing date to commence an |
| so until at least after the 2008 Chancellor's Budget. | | | | enquiry when the company tax return has been |
| Corporation Tax Rates | | | | submitted on time and longer if the return is submitted |
| While the main rate of Corporation Tax remained at | | | | late. Companies are advised in writing when an enquiry |
| 30% in 2006 and 2007 which will be reducing to 28% | | | | starts and ends. If no adjustments are required HMCE |
| in 2008. The small company corporation tax rate | | | | advise the enquiry has finished. Any adjustments are |
| applicable to companies with annual profits under | | | | also advised in writing and the company then has 30 |
| £300,000 was increased from 19% in 2006 to | | | | days to file an amended Company Tax Return failing |
| 20% effective on profits earned after 1 April 2007 and | | | | which HMCE will amend the return. A company can |
| is set to increase further on 1 April 2008 to 21% and to | | | | apply to the Inland Revenue Commissioners for an |
| 22% from 1 April 2009 as announced in the March | | | | enquiry to be closed at any time during an enquiry. |
| 2007 Budget. Corporation Tax on ring fenced profits | | | | Separate codes of practice exist for local offices and |
| being income and gains from oil extraction activities or | | | | specialist compliance offices. |