Corporation Tax for Company Tax Return (CT 600)

Company tax in the UK is called Corporation Tax and it is a tax on the profits of UK limited companies and other organisations. Corporation tax rates vary and the percentage you pay is dependent on your company’s taxable profits.

In 2023 corporation tax rates increased in the UK. Find out more here. But in summary:

For small companies with profits of less than £50,000, the corporation tax rate is 19%. For businesses whose taxable profits exceed £250,000, the rate increases to 25%. For companies in between there will be a sliding scale of rates.

Companies with taxable profits between £50,000 and £250,000 will pay tax at the 25% rate, but this will be reduced by a marginal relief meaning CT rates of between 19% and 25%.

Corporation Tax is payable by all UK limited companies registered at Companies House or foreign companies with a UK base. There are other organisations which might also need to pay corporation tax such as:

• Members clubs, societies, and associations
• Trade associations
• Housing associations
• Groups of individuals carrying out a business (such as co-operatives)

A Company Tax Return is the financial information that most companies file with HMRC each year to report on their earnings, losses, loans and any other factors relevant to their tax liability.

A company tax return includes several essential components and other supporting documents including:

• CT600 form: The primary form for reporting company profits
• Company accounts: A detailed breakdown of the company’s financial transactions
• Computations: Explanations for the figures included in the return
• Supplementary documents: Additional information as required

Companies must have accurate financial records and information about their profits, losses, expenses, and other financial transactions for the accounting period.

Some of the information required can be complex and time consuming. Below are just some of the things you need to include on your CT600 and company tax return form.

It is advisable to get a qualified accountant such as dns accountants to complete your CT600 and company tax return for you as they will have a full understanding of the requirements and tax regulations.

• 1. Company name
• 2. Company registration number
• 3. Tax reference (company unique taxpayer reference)
• 4. Type of company
• 5. Period covered by the return
• 6. Repayments this period covered
• 7. Claim or relief affecting an earlier period
• 8. If you’re making more than one return now
• 9. Estimated figures
• 10. If the company is part of a group or is not small
• 11. Notice of disclosable avoidance schemes
• 12. Transfer pricing
• 13. Transfer pricing adjustment claimed
• 14. Small or medium sized enterprise exemption
• 15. Accounts and computations
• 16. Turnover
• 17. Trading profits
• 18. Trading losses brought forward set against trading profits
• 19. Net trading profits
• 20. Bank or building society interests
• 21. Annual payments not otherwise charged to Corporation Tax
• 22. Non-exempt dividends
• 23. Income from which income tax is deducted
• 24. Income from property
• 25. Non-trading gains on intangible assets
• 26. Gross chargeable gains
• 27. Allowable losses including losses brought forward
• 28. Net chargeable gains
• 29. Profits before other deductions and reliefs
• 30. Deductions and reliefs
• 31. Losses brought forward against investment income
• 32. Non trade deficits on loan relationships
• 33. Profits before other deductions and reliefs
• 34. Losses on unquoted shares
• 35. Management expenses
• 36. UK property business losses for previous accounting period
• 37. Capital allowances
• 38. Non trade losses on intangible fixed assets
• 39. Trading losses for this or later accounting periods
• 40. Amounts carried back from later accounting periods
• 41. Group relief
• 42. Associated companies
• 43. Ring fence profits
• 44. Coronavirus support schemes including coronavirus job retention scheme
• 45. Tax outstanding or overpaid

Full details of all the things that need to be declared can be found on the HMRC website in the company tax return guide.

There are many tax reliefs and credits available and understanding these when completing a company tax return is critical. Reliefs and credits need to be included on a company tax return and taken into consideration such as Corporation tax marginal relief, double taxation relief, community investment relief, development credits and research and development tax credit received.

If the company is based in the UK, it is liable for Corporation Tax on all of the profits that it makes, even profits that originate from another country.

If a company is based overseas but trades through a UK branch or office, then only the taxable profits generated in the UK will be liable for UK tax.

If your UK-based company is required to pay tax in another country, there may be double-taxation relief in place meaning you can deduct the tax you pay overseas from your UK Corporation Tax liability.