Running a limited company comes with more paperwork than you might expect. You have your bookkeeping to keep up with, invoices to record, expenses to check, and then there are the filings that need to go to Companies House and HM Revenue & Customs (HMRC). If you are new to running a company, it is easy to assume that these are all part of the same process. They are not. Companies House and HMRC have different jobs, and your company has separate responsibilities towards each of them.
Companies House is the official register of companies in the UK. When you set up a limited company, your company details are recorded, and you need to keep them up to date. One of your main responsibilities is preparing and filing your annual accounts, which show how your company has performed financially and what its financial position looks like at the end of the year. All companies, including dormant companies, must file annual accounts, although the accounts you need to prepare may vary depending on your company’s size and circumstances.
Your accounts are prepared using your company’s financial records. They generally include information such as your income, expenses, assets, liabilities and profit or loss. Depending on the size and type of your company, you may be able to file simpler accounts, and you may not need an audit. The important thing is that the accounts must meet the relevant requirements and be filed by the deadline.
What Does HMRC Need from Your Company? A Detailed Guide
HMRC needs more than just a figure showing how much Corporation Tax you owe. If your company has been asked to submit a Company Tax Return, you need to provide the information HMRC uses to understand your company’s income, expenses, profits, losses and tax position. A Company Tax Return normally includes the CT600 tax return, any relevant supplementary pages, your company accounts and tax computations showing how the figures were worked out.
Your Company And Tax Details
The return starts with basic information about your company. This includes your registered company name, Companies House registration number and Unique Taxpayer Reference (UTR). You also need to provide details about the accounting period covered by the return. Getting these details right matters because HMRC uses them to match the return to your company and the correct tax period.
Details Of Your Income And Profits
HMRC needs to know how much money your company has made during the accounting period and how that income has been treated for Corporation Tax purposes. This can include trading profits, interest and other income or gains that need to be reported. The CT600 has specific sections for different types of income, so the information you provide depends on what your company does and the transactions it has had during the year.
You May Need To Provide Information About:
Your accounts will show the expenses your company has recorded, but Corporation Tax rules determine which amounts can be deducted when working out taxable profits. HMRC therefore needs enough information to see how you have arrived at the taxable figure. Depending on your circumstances, your return may also include claims for certain reliefs, allowances or other deductions.
This is one reason why you should not simply take the final profit from your accounts and assume that it is automatically the amount on which Corporation Tax is calculated. Accounting profit and taxable profit can be different, and the tax computation explains the adjustments made between the two.
Your Tax Calculation
Once your income, deductions, reliefs and other relevant figures have been considered, HMRC needs the calculation of the Corporation Tax due. The return includes sections for working out the tax chargeable, any applicable reliefs or reductions, and the final amount outstanding or overpaid.
The tax computation is particularly important because it connects the figures in your Companies House annual accounts to the figures entered on your tax return. HMRC requires these calculations to show how the relevant entries in the return were arrived at from the accounts.
Extra Information If Your Company Needs It
Not every company has the same tax affairs, so you may need to complete supplementary pages as well. For example, there are additional sections covering areas such as group arrangements, loans to participators, insurance companies, research and development, controlled foreign companies and certain property or energy-related matters. You only need to include the supplementary pages that apply to your company.
What Should You Have Ready Before Filing?
Before you start preparing the return, make sure your bookkeeping and financial records are up to date. You should have enough information to support the figures in your accounts and explain any adjustments made for tax purposes. This makes it much easier to prepare an accurate return and deal with any questions later.
In simple terms, HMRC wants to see what your company earned, what it spent, how its taxable profit was calculated and how the final Corporation Tax figure was reached. Keeping your records organised throughout the year makes this process much more straightforward and reduces the chance of having to chase missing information when your filing deadline is approaching.
You do not need to make company filing more complicated than it needs to be. Keep good records, know your deadlines, check what each organisation requires and ask for help when you are unsure. A little preparation throughout the year can make year-end filing far less stressful.
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