Managing your business in the UK comes with a wide array of responsibilities, and one of the most important tasks is staying on top of your corporation tax obligations. The process can seem daunting, but with proper preparation and an understanding of the deadlines, you can ensure that your business remains compliant and avoids any unnecessary penalties. This guide will provide a step-by-step approach to help you prepare for corporation tax deadlines and streamline your business processes.

Understanding Corporation Tax

Corporation tax is a mandatory tax that UK-based companies and organisations must pay on their profits. All limited companies, as well as some clubs, societies, and associations, are required to pay this tax. The current corporation tax rate is set by the UK government and can vary from year to year, so it’s essential to stay updated on any changes.

Corporation tax differs from personal taxes in that it applies only to profits generated by the business and is calculated based on the company’s annual financial performance. To remain compliant, you must report your company’s profits, file a tax return, and pay any taxes owed by the set deadline.

Know Your Deadlines

The first step to preparing for corporation tax is understanding when your deadlines fall. In the UK, your company’s corporation tax return (also known as a CT600 form) is due 12 months after the end of your accounting period. For example, if your company’s financial year ends on 31st March, your tax return will be due by 31st March of the following year.

However, it’s important to note that the payment for corporation tax is due earlier—9 months and 1 day after the end of your accounting period. This means that if your financial year ends on 31st March, the tax payment is due by 1st January the following year.

Missing these deadlines can result in fines, interest charges, or even more severe penalties from HMRC (His Majesty’s Revenue and Customs). Therefore, timely preparation is critical.

Use Corporation Tax Software

Corporation tax software is a valuable tool for businesses to streamline the process of calculating, reporting, and paying corporation tax. Designed to simplify complex tax tasks, it helps companies accurately prepare their tax returns by automating calculations, organising financial data, and ensuring compliance with HMRC regulations. 

Using corporation tax software will help you calculate your tax liability. You will need to keep track of your income, expenditure, and purchases of any assets such as computer equipment, furniture, or vehicles. By using this software, businesses can reduce the risk of errors, save time, and ensure timely submission of their tax returns, ultimately enhancing efficiency in tax management.

Step-by-Step Preparation for Corporation Tax Deadlines

1. Keep Accurate Financial Records

To file an accurate corporation tax return, you need to maintain up-to-date and accurate financial records throughout the year. This includes tracking income, expenses, payroll, dividends, and any other financial transactions related to your business.

Consider using accounting software to automate much of the bookkeeping process. Such software can help you organise receipts, invoices, and other documents, making it easier when it’s time to file your corporation tax return.

2. Calculate Your Profits

Corporation tax is charged on the company’s profits, so accurately calculating these is essential. The taxable profit is derived from the revenue your business earns, minus any allowable business expenses and deductions. Common allowable expenses include rent, employee wages, equipment costs, and marketing expenses.

Some businesses may also qualify for reliefs or allowances, such as the Annual Investment Allowance or Research and Development (R&D) tax relief. Make sure you are aware of all deductions available to your business to minimise your corporation tax liability.

3. Review Your Payment Due Date

As mentioned earlier, corporation tax payment is due 9 months and 1 day after the end of your accounting period. This date can differ from your tax return submission deadline, so it’s important to mark this on your calendar.

Ensure that your business has enough cash flow to cover the tax liability on or before the due date. You can arrange payments online, through direct debit, or by Bacs or CHAPS transfer. It’s always a good idea to set reminders or schedule payments in advance to avoid last-minute issues.

4. Submit Your Corporation Tax Return Online

The UK government requires businesses to submit their corporation tax returns online through the HMRC website and activate their corporation tax service. You will need to register for HMRC’s online services if you haven’t done so already. When submitting, ensure that your CT600 form is fully completed, including details of your company’s profits, expenses, and any applicable tax reliefs.

Once submitted, HMRC will review your return, and any discrepancies or mistakes could lead to penalties or delays, so double-check your figures before submission.

What Happens if You Miss a Deadline?

Missing a corporation tax deadline can result in penalties. If you file your tax return late, you could face an automatic fine of £100. Further delays may lead to additional penalties, and HMRC will charge interest on any late payments. In extreme cases, continuous non-compliance could trigger an investigation by HMRC, which may lead to larger fines or legal action.

To avoid such consequences, it’s crucial to plan ahead and ensure that all corporation tax obligations are met on time.

Conclusion

Preparing for corporation tax deadlines doesn’t have to be a stressful process. By staying organised, keeping accurate financial records, and understanding your business’s obligations, you can manage your tax responsibilities with confidence. Making timely preparations will ensure that you remain compliant with HMRC and avoid any costly penalties.

The Financial Conduct Authority’s recent letter to advice firms has certainly got people talking with its specific mention of consolidators and its desire to gather data from them.

The FCA specifically said consolidators are expected to “ensure the delivery of good outcomes is central to your culture”. That should come naturally to any business operating in this area. But, in addition, their “leadership, governance, oversight arrangements and controls should be effective, adequately resourced and commensurate with your growing size and complexity”.

That second part is the bit where appropriate systems need to be put in place to make sure there is genuine oversight. There can be no true leadership or governance among a number of firms spread throughout the country without a central place to collate and analyse data.

They need to analyse all the important pieces of information, whether that’s client reports, investment data or where advisers and paraplanners are spending their time.

I speak to a lot of consolidators, whether it’s those running the businesses or the owners at the private equity houses, and this is often one of the trickiest parts for them: rationalising many businesses and finding a way to gather the right data in an orderly fashion.

Without this, it’s immensely difficult to implement the correct compliance controls and maintain consistent advice and investment processes.

In fact, it’s even difficult to report data the FCA is trying to gather without these systems in place. And don’t forget consolidators need to further scale all their processes as the business continues to grow and absorb more firms.

Consolidators can even take note of the regulator’s own data gathering and “data-led” approach.

The regulator has been pushing to change its culture and enforcement to a much more data-based approach. It’s invested resource and effort to do so, which should make its monitoring more efficient and effective.

To draw the parallel, the central point of acquiring multiple advice and investment management firms is to truly consolidate them. The endgame is to pull together multiple businesses and create efficiencies that work for all parties: the investors, the business and the clients can all be aligned.

That means cost savings that can be passed onto clients and better advice processes to create consistent outcomes for them, too. All together that means a better value proposition for clients and, hand-in-hand, it provides value for the consolidator and makes life easier for advice professionals.

Better data control and monitoring should hit all the right Consumer Duty notes: improved value for money, better consumer communication and support, and improved oversight that maintains consistency in the products and service provided.

This is exactly what the FCA is looking for. The regulator isn’t naive: it knows these large private equity firms are entering the market and spending big to make a profit on their investment.

But it wants to see consolidation that also provides the end client value: they’re the ones at the heart of the business. Value creation for the business certainly doesn’t have to be mutually exclusive from value creation for the end clients. At the end of the day, without them it’s all worth nothing.

The FCA knew gathering data was important in its own regard and has done the right things to make its processes more efficient and data centric. Consolidators can take a leaf out of the regulator’s book and make sure they focus on collecting and analysing the right information to provide value for both clients and the business.

Alex Cowan-Sanluis is chief executive of Platform One

HOUSEHOLDS could save as much as £235 a year on broadband mobile and TV bills with an easy move.

Consumer brand Which? has found that switching your provider can save you some big cash.

1

According to its research, on average, out-of-contract TV and broadband customers could save £160 by switching.

Sky customers surveyed saved most – a bumper £235 a year on average by switching to a better deal.

TV and broadband customers who haggled with their current provider rather than switching still saved £117 on average. 

Which?’s study also found there were decent savings for broadband-only customers who switched providers, with the average being £105.

Customers switching from BT, Sky or Virgin Media saved even more – up to £165 on average for VM customers.

Broadband customers who haggled saved £55 per year, with Virgin Media customers seeing the biggest average saving of £81. 

There was less of a difference in savings between mobile customers who switched and those who haggled.

Mobile customers at the end of their contract saved £67 on average by switching and those that haggled saved a slightly lower £61.  

Vodafone customers saved £146 by switching, more than twice the £67 average.

EE and O2 customers also saved an average of £122 and £132, respectively.

When it came to haggling, it was EE customers who stood to save the most, at £101 a year on average. 

Natalie Hitchins, Which? Head of Home Products and Services, said: “Our latest research shows out-of-contract broadband, TV and mobile customers can save a substantial amount of money by switching providers or haggling with their current one – and that most people find the process easy.

“With many telecoms providers already adopting Ofcom’s ban on unpredictable mid-contract price hikes before it officially comes into effect in January, consumers can more easily compare deals and should feel empowered to switch and potentially save hundreds of pounds.”

Results of the survey

The consumer champion surveyed more than 5,000 customers whose broadband, combined broadband and TV or mobile phone contracts had ended in the past 12 months, asking if they had switched or haggled, and how much they had saved on their bills in the process.

Which?’s research found that most consumers found the switching process easy.

This was the case for 75% of broadband, 73% of mobile customers, and 55% of broadband and TV customers. 

The survey found that price was the most common reason for switching.

But people also then benefitted from better customer service, faster download speeds and better connections.

Three in 10 broadband switchers said customer service was getting better after switching, while just 6% reported it getting worse.

For those who changed mobile networks, a third said customer service improved and three per cent said it got worse. 

For download speeds, nearly four in 10 broadband customers said they got faster after switching, versus one in eight who said they got slower.

For mobile network switchers, a quarter found they improved versus nine per cent who reported they got worse. 

Around four in 10 got a more reliable broadband connection after switching, while one in eight found it got worse.

Mobile network reception improved for half of the switchers but got worse for one in seven.

How to switch

Switching providers is far easier now because as of September, customers only need to contact their new provider to switch.

This makes it easier to move to a cheaper deal without your current provider trying to convince you to stay, even if you can find a better offer elsewhere.

Since 2015, people have been able to switch between phone and broadband providers on Openreach’s network – like BT and Sky – by letting their new provider handle the switch.

However, if you were switching to or from a different network, such as Virgin Media, which uses its own private network, you had to contact your existing provider to arrange the switch as well.

Ofcom‘s new “One Touch” rules, which started last month, have changed this.

Now, landline and broadband customers on any network only need to contact their new provider to make the switch.

Under the new rules, customers won’t have to pay notice-period charges beyond the switch date, so they will no longer be paying for the old service after the new one starts.

Plus, providers must also compensate customers if they experience issues with the switch or are left without service for more than one working day.

However, the exact amount of compensation you’ll receive will be issued on a case-by-case basis.

The new rules bring broadband switching in line with mobile switching.

Since 2019, mobile phone customers have been able to “text to switch” without the hassle of having to call their current network.

How one-touch switch works

The new “One Touch” process is designed to make it easier to switch providers and get a faster package, a cheaper deal, or better customer service.

It will also make it quicker – just one day when this is technically possible.

There are three steps to complete the switch:

1. A customer will contact their chosen new provider and give their details.
2. The customer then automatically receives important information from their current provider, including any early contract termination charges they may have to pay, and how the switch may affect other services the customer has with the company.
3. If the customer wants to go ahead, the new provider will then manage the switch.

The new process means that customers no longer need to notify their current provider 30 days before switching.

Instead, the operators handle all billing and activation dates in the background.

Rule changes

The findings come ahead of Ofcom’s ban on unpredictable mid-contract price hikes which comes into effect in January 2025.

Telecom firms have faced criticism for implementing mid-contract price rises on fixed contracts that exceed inflation over the past four years.

Due to clauses in contracts, providers are allowed to impose annual increases, typically in April.

These hikes are linked to either the Consumer Price Index or Retail Price Index inflation rate, which has surged during the cost-of-living crisis.

As a result, millions of customers experienced increases of up to 8.8% this year, adding as much as £50 to their bills.

However, from January 17, 2025, Ofcom will require telecom firms to display mid-contract price increases in pounds and pence.

The rules are designed to protect customers by ensuring they know exactly how much their contract will increase before they sign up.

Instead of being linked to inflation, which can fluctuate, the price rises will be clearly stated in pounds and pence.

However, some experts have slammed the rule change for “unfairly” impacting customers on cheaper contracts.

Earlier this year, The Sun revealed that millions of mobile and broadband customers on cheaper contracts will be hit by huge bill rises under the new mechanism.

Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.

Plus, you can join our Sun Money Chats and Tips Facebook group to share your tips and stories

Don’t want full access? REGISTER NOW for limited access and to subscribe to our newsletters.

THE number of homes for sale hit a ten year high in October, according to Rightmove.

Across Britain the number of properties put on the market was 12% higher than a year ago.

1

Meanwhile, the number of people contacting estate agents about properties for sale was up by 17% compared with the same period last year.

Rightmove said the number of homes on the market is driving up competition between sellers as potential homeowners continue to find their budgets are stretched.

A greater choice of homes is giving buyers more negotiating power, which is helping to stop prices from rising rapidly.

Meanwhile, some buyers are waiting for clarity from this month’s Budget and cheaper mortgage rates before they make an offer.

As a result, the typical price being asked for a home coming onto the market increased by £1,199, or 0.3%, this month to reach £371,958.

This is much lower than the average seasonal 1.3% monthly increase at this time of year.

Meanwhile, asking prices are 1% higher than a year ago, when a typical home was listed at £368,231, around £3,727 less than it would be now.

London boasts the highest average asking price of any UK region.

A typical home in the capital is worth £694,906 after prices rose by 1.1% year on year.

Homes in the South East are also well above the national average, with a typical property worth £483,780.

Prices in the region are down 0.6% in the last year but still remain well above other regions.

The North East is still the cheapest region in England, with a typical home worth £192,742, 4.9% higher than a year ago.

Tim Bannister, a property expert at Rightmove, warned that the ball is now “in the buyer’s court”, which means sellers need to price competitively to find a buyer.

He added: “The big picture still looks positive for the market heading into 2025. Market activity remains strong, despite affordability pressures on movers. 

Different types of mortgages

We break down all you need to know about mortgages and what categories they fall into.

A fixed rate mortgage provides an interest rate that remains the same for an agreed period such as two, five or even 10 years.

Advertisement

Your monthly repayments would remain the same for the whole deal period.

There are a few different types of variable mortgages and, as the name suggests, the rates can change.

A tracker mortgage sets your rate a certain percentage above or below an external benchmark.

This is usually the Bank of England base rate or a bank may have its figure.

Advertisement

If the base rate rises, so will your mortgage but if it drops then your monthly repayments will be reduced.

A standard variable rate (SVR) is a default rate offered by banks. You usually revert to this at the end of a fixed deal term, unless you get a new one.

SVRs are generally higher than other types of mortgage, so if you’re on one then you’re likely to be paying more than you need to.

Variable rate mortgages often don’t have exit fees while a fixed rate could do.

Advertisement

“Once we have more certainty about the contents of the Budget, hopefully followed by speedy second and third Bank Rate cuts, we could see another surge in market optimism like we had in the summer.”

The average 5-year mortgage rate is now 4.61%, up slightly from 4.55% last week.

This is still a big improvement from the average of 6.11% when rates peaked in July 2023.

With more homes being put on the market the average time they are taking to sell has increased.

What it means for you

Rightmove said it now takes 61 days to secure a buyer, a slight uptick from an average of 59 days in the summer.

Competition for buyers is particularly fierce at the top of the market.

The number of four-bedroom detached houses and five-bedroom-plus homes available for sale is 17% ahead of last year.

Marc von Grundherr, director of Benham and Reeves in London, said monthly property transactions are now at their strongest since 2022.

He said: “Mortgage approval levels have been strengthening for much of this year and we’re now seeing this increase in buyer demand start to filter through to actual sales. 

“This improving market momentum has also helped to tempt many sellers back into the market who had previously put their plans to move on pause.”

Who else tracks house prices?

Several big banks also track property prices and release monthly indexes.

Halifax is part of Lloyds Banking Group, which is the UK’s biggest mortgage lender.

It has been tracking house prices since 1983 and published a monthly house price index based on the mortgage data it holds.

Nationwide also publishes a monthly index which tracks the average price of homes on which it provides mortgages.

As their figures are based on mortgage approvals they don’t include cash buyers who purchase a property without needing a mortgage.

The official measure of house prices is from the Office for National Statistics (ONS), which uses data from the Land Registry where the actual sold price is recorded.

These figures are the most accurate of all of the indexes but the figures are released three months after the homes are sold, so there is a big time lag.

Online property websites Rightmove and Zoopla also publish monthly house price data.

Rightmove’s data is based on asking prices from the properties listed on its website.

Meanwhile Zoopla uses sold prices, mortgage valuations and data on agreed sales.

Neither website takes into account the price a property was sold for, unlike the ONS.

Some properties could end up being sold for higher or lower, while others may not sell at all.

Here’s the latest data from other indexes:

• Nationwide: House prices rose by 0.7% in September and increased by 3.2% annually. A typical property is now worth £266,094.
• ONS: property prices increased by 2.8% annually to £293,000 in the year to August.
• Zoopla: House prices rose by 0.7% in the year to August, with a typical property now worth £267,000.

Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.

Plus, you can join our Sun Money Chats and Tips Facebook group to share your tips and stories