So, you’ve got a new business and have just registered with HMRC. You now need to make sure you’re up to date with how and when to pay corporation tax on your profits.
Here’s a breakdown of all the deadlines for filing tax returns and making tax payments. We’ll also explain how New Millennia can help you with what might initially seem a mammoth task.
Filing Annual Accounts At Companies House
All limited companies are legally required to present annual accounts to Companies House each year.
These annual accounts should include:
- Profit and loss statement
- A balance sheet
- Notes about the accounts
- A director’s report
- An auditor’s report
- Name and signature of the relevant company directors
It’s worth noting that a small company is only required to submit abbreviated accounts to Companies House. The vast majority of files will need abbreviated information, not including extra information such as profits and losses.
When Are My Annual Accounts Due?
The deadline for filing your annual accounts is 9 months after the end of your accounting period.
This is the case even if the date falls on a weekend or bank holiday (this applies to every corporation tax deadline).
Note that if you miss the deadline for filing your accounts to Companies House, you will be subject to a fine in the range of £150-£1,500. This figure is dependent on how much you miss the deadline by.
Sending A Confirmation Statement To Companies House
Your company must also send a Confirmation Statement at least once every 12 months, even if your business is not currently receiving any income.
The purpose of this statement is to confirm that the information Companies House holds about your business is all accurate.
Hopefully all information should be correct and if so, all you have to do is ‘check and confirm’ and then submit the statement. Any incorrect data should be updated before or at the same time as sending your statement.
Other important elements to include in the statement are:
- Details of your registered office
- Names and addresses of directors
- A statement of capital and shareholder information
- The company’s SIC code
- A register of ‘people with significant control’
When Is My Confirmation Statement Due?
Your confirmation statement is due either 12 months after your business was formed, or 12 months after you filed your last statement.
You have 14 days after this 12-month mark to submit the statement and it can be delivered either by post, or online via WebFiling.
The good news is that if your statement is overdue, you will not face a penalty fine. However, failing to submit a statement at all could see your company dissolved and company directors facing prosecution.
The Next Step: Submitting A Tax Return To HMRC
Once you receive a ‘notice to deliver a Company Tax Return’ from HMRC you must then complete and submit a return. This states how much tax is due to be paid by your business, and must be filed even if you have made a loss.
The return should include calculations of your profit or loss for Corporation Tax, and you will also need to work out your Corporation Tax bill. An accountancy firm can be useful here in preparing and filing your tax return for you.
The longest time a tax return can cover is 12 months. If your accounting period is longer, make sure to file two tax returns for this period.
What Is The Deadline For My Tax Return ?
Like your confirmation statement, your tax return is also due 12 months after the end of your accounting period.
As you might expect, there are fines for filing late:
- If you are 1 day late you will be issued with a £100 fine
- More than 3 months late requires a further £100 to be paid
- Filing your return six months late means that HMRC will estimate your corporation tax bill and add 10% of the bill as a penalty
- 12 months late then adds another 10% of the tax liability
Lastly: Paying Your Corporation Tax Bill
Any business registered as a limited company is legally required to pay corporation tax on any profits, investments and chargeable gains.
The corporation tax rate for limited liability firms with profits of £250,000 and over is now 25% of taxable profits, after increasing from 19% in April of this year.
If your business makes profits up to £50,000, you will continue to pay corporation tax at 19%.
Companies with profits between those two figures are subject to a tapered rate, based on how much Marginal Relief they can claim.
💡Tip: The government’s Marginal Relief calculator can help you work this out.
Remember also that HMRC has now stopped accepting payments via personal credit card.
Corporation Tax Deadlines
Corporation tax must be paid 9 months and 1 day after the end of your accounting period. You can actually check your company’s accounting period by signing in to HMRC’s online service.
If your corporation tax is paid late, or not at all, you will be charged interest from the day after the tax should have been paid. The interest rate is currently set at 2.75%.
Other Deadlines Recruitment Directors Need To Be Aware Of
If you have just formed your own recruitment agency, there are numerous deadlines you need to keep track of to ensure your company stays up to date.
Whilst, as your accountants, we will manage these deadlines for you, it is important that directors are also aware of, and preparing for, the payments that are due.
National Insurance: These are calculated on your tax return and payments are due on the same dates.
PAYE: PAYE payments are due on the 22nd of each month and based on the RTI submission data.
Intermediary Reporting: this is necessary if you are making contract placements. Submit the information via the HMRC portal 1 month after the quarter end.
CIS Return: if your recruitment agency is within the construction industry, they need to submit a CIS return by the 19th of the following tax month.
Self-assessment tax return: separate to the company, directors must also complete this return by 30th January.
Our Tips For Staying On Top Of Tax Deadlines
- Mark each of the dates outlined in this guide in your business calendar.
- Consider using an accountancy firm to assist with your tax submissions. New Millennia provides a tailored package of accountancy services for both start-up and SME recruitment firms.
- Ensure that you keep your contact details up to date with HMRC and Companies House so that you receive relevant reminders.
- Keep up with changes and updates to taxation, for example, the Making Tax Digital programme which is developing in phases each few years:
In summary: The Key Milestones
📌Present your accounts to Companies House 9 months after the accounting period
📌File your corporation tax return 1 year after the accounting period
📌The corporation tax deadline is 9 months and 1 day after the accounting period
Remember to get in touch with us to find out how we can help you tackle all your corporation tax obligations for your recruitment business.