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Legal duties for Corporation tax

Legal duties for Corporation tax

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Contents

Legal duties

If your company is subject to Corporation Tax requirements, you must:

  • tell HM Revenue & Customs (HMRC) that your company is liable for Corporation Tax;
  • pay the right amount of Corporation Tax on time; and
  • file a Company Tax Return and supporting documents.

Deadlines for telling HMRC

Starting up a new company that's active

If you start a new limited company, you must tell HMRC within 3 months of your company starting business (i.e. becoming active). If you register ('incorporate') the company via the Companies House Web Incorporation Service, and your company is active at the time of incorporation, you can tell HMRC that your company is active at the same time as you incorporate it.

When Companies House tells HMRC that a new company exists, HMRC will send you an introductory pack within 6 weeks.

This pack contains explanatory notes and forms CT41G (new company details) and CT41G (dormant company insert). You need to read these forms carefully, to see if you need to complete them and send them back to HMRC. If you don't receive a pack, you must still tell HMRC your company or organisation is active.

Starting up a new company that isn't yet active

If your new company is dormant, you must tell HMRC as soon as possible. That way, your company won't be treated as active and you won't receive unnecessary letters, such as a 'Notice to deliver a Company Tax Return'.

Use Form CT41G (dormant company insert) to tell HMRC that your company isn't yet active.

When a dormant company becomes active

If your new company was dormant and then starts to carry on business or to trade, you must tell HMRC within 3 months of starting business activity. The easiest way to do this is online via the joint registration facility of the Companies House Web Incorporation Service or the HMRC's online registration service. You can also do this using Form CT41G (new company details).

If your company or organisation was active before it became dormant and is now active again, you should contact your Corporation Tax office.

When an existing company becomes dormant

If your company stops trading or isn't active, you need to tell HMRC in writing as soon as possible.

HMRC will send your company a 'Notice to deliver a Company Tax Return' for the period up to the date your company became dormant.

From the date your company becomes dormant, HMRC will stop treating your company as active and you won't get any unnecessary letters.

Deadlines for paying Corporation Tax

The deadline for paying Corporation Tax is before the deadline for filing a Company Tax Return.

The Corporation Tax payment deadline is called the 'normal due date' and can vary depending on the amount of your company's taxable profit.

You must pay Corporation Tax electronically. Interest is charged on late payments.

Payment deadlines if your company's taxable profits are £1.5 million or less

You must pay Corporation Tax within 9 months and one day from the end of your company's Corporation Tax accounting period.

For example, if your company's accounting period ends on 31 May, the Corporation Tax payment is due on or before 1 March the following year.

Payment deadlines if your company or organisation's taxable profits are more than £1.5 million

Corporation Tax must be paid in 4 instalments, unless your company's total liability for the accounting period is £10,000 or less.

You can find out more about instalment payments on the HMRC website.

Deadlines for filing a Company Tax Return

You must file your Company Tax Return within 12 months of the end of your company's Corporation Tax accounting period. You must file it online and include a Company Tax Return form and other supporting documents.

If you file its return late, your company will be charged an automatic penalty, even if no Corporation Tax is payable.

You can find more information on Corporation Tax penalties and interest charges on the HMRC website.