UK Company Tax Return Guide

Compliant, accurate company tax returns are a core legal duty for every incorporated business in the UK. For business owners and finance directors, getting the CT600 right and filed on time protects cash flow, reduces risk, and avoids HMRC penalties or enquiries that can drain management time. Errors or missed deadlines can lead to automatic fines, interest on late-paid Corporation Tax, and potential compliance checks under HMRC’s information powers.

What this article is about: This comprehensive guide explains the UK company tax return process end to end — what a company tax return is, who must file, what information must be included, and how to meet HMRC’s digital filing requirements. It sets out deadlines for filing and paying Corporation Tax (including the Quarterly Instalment Payments regime for larger businesses), late-filing penalties and tax determinations, record-keeping rules, key tax adjustments, reliefs and allowances (including full expensing and the merged R&D regime from April 2024), and practical steps for strategic tax management and responding to HMRC compliance checks.

 

 

Section A: Understanding Company Tax Returns

 

The first step to compliance is understanding what a company tax return is, who must file it, and how it differs from statutory accounts filed at Companies House. This section also clarifies how HMRC defines the relevant period for Corporation Tax and what information HMRC expects to see with a CT600 submission.

 

1. What is a company tax return?

 

A company tax return is the formal submission made to HMRC (usually on form CT600) that reports a company’s taxable profits and Corporation Tax due for a specific accounting period. It is distinct from, although informed by, the financial statements prepared under UK GAAP or IFRS. The return must be supported by detailed tax computations that reconcile accounting profit to taxable profit and include the relevant schedules for reliefs, allowances, and losses.

Returns must be filed online in iXBRL format, meaning both the statutory accounts and the tax computations are tagged and submitted digitally. Directors remain legally responsible for the completeness and accuracy of the return even when using advisers or software.

 

2. Who needs to file a company tax return?

 

All companies within the charge to Corporation Tax are required to file a company tax return when HMRC issues a Notice to Deliver a Company Tax Return, regardless of whether a profit or a loss has been made. This typically includes:

• UK-incorporated companies.
• Certain unincorporated associations (for example, clubs, co-operatives, and societies) that are within the charge to Corporation Tax.
• Overseas companies to the extent they have a UK permanent establishment.

 

Dormant companies are not normally required to file unless HMRC issues a notice. If a notice is issued, filing is mandatory, even where there is no activity to report.

An accounting period for Corporation Tax purposes generally begins when the company starts trading, becomes active for tax, or acquires a source of chargeable income, and it cannot exceed 12 months. If company accounts cover more than 12 months, the company must file two separate tax returns to cover that extended period.

 

3. What information must be included?

 

A complete submission typically contains:

• The CT600 return.
• Statutory accounts (if required) prepared under UK GAAP or IFRS.
• Detailed tax computations showing adjustments from accounting profit to taxable profit.
• Schedules for reliefs and allowances (for example, capital allowances, group relief, the merged R&D regime for periods beginning on or after 1 April 2024) and loss claims or carry-backs/forwards.
• Any supplementary pages relevant to the company’s activities (for example, loan relationships, intangible assets, controlled foreign companies).

 

The computations should clearly identify add-backs (such as disallowable entertaining costs), capital allowance claims (including full expensing where available), and any specific claims or elections the company is making within applicable time limits.

 

4. Difference between company accounts and tax returns

 

Company accounts are a statutory record for shareholders, creditors, and the public and are filed at Companies House. Company tax returns are sent to HMRC to calculate and assess the Corporation Tax liability. While figures from the accounts provide the starting point, tax law often requires adjustments that differ from accounting treatment, such as replacing depreciation with capital allowances or adjusting for provisions and fair value movements.

Understanding this distinction ensures directors do not assume that compliant accounts automatically translate to a compliant Corporation Tax position. The reconciliation from accounting to taxable profit is a core element of the return and must be supportable with records and working papers.

Section A Summary: A company tax return (CT600) reports taxable profits and Corporation Tax due for a defined accounting period and must be supported by tagged (iXBRL) accounts and computations. Most companies within the charge to Corporation Tax must file when HMRC issues a notice, including where there are losses or no activity to report. Accounting and tax reporting serve different purposes; accurate tax computations and clear reconciliations are essential to compliance.

 

 

Section B: Filing & Deadlines

 

Meeting HMRC’s filing and payment deadlines is critical. A single missed date can trigger automatic penalties and interest, and for larger or more profitable companies, Corporation Tax may need to be paid through accelerated Quarterly Instalment Payments. This section sets out how accounting periods work for Corporation Tax, when to file and pay, how to submit digitally, and what happens if you are late.

 

1. Corporation Tax accounting periods

 

A company’s Corporation Tax is assessed by reference to an accounting period, which can be shorter than but not longer than 12 months. In practice this usually aligns to the financial year covered by statutory accounts, but it can differ. An accounting period typically begins when the company starts trading, becomes active for tax, or acquires a source of income.

• If company accounts cover more than 12 months, the company must file two Corporation Tax returns to cover that extended period.
• New companies may have short first accounting periods, requiring more than one return in the first year.
• HMRC uses the accounting period to set statutory filing and payment deadlines, including instalments where applicable.

 

 

2. Filing deadlines with HMRC

 

The deadline for filing a company tax return is 12 months after the end of the accounting period. For example, a period ending 31 March 2025 must be filed by 31 March 2026.

The deadline for paying Corporation Tax is generally 9 months and 1 day after the end of the accounting period. Payment therefore falls due before the filing deadline. Larger businesses may be required to pay by instalments (see below).

Quarterly Instalment Payments (QIPs): Companies that are “large” or “very large” for Corporation Tax must pay in instalments based on estimated current-year liabilities. As a guide:

• Large companies generally pay in four instalments spanning months 7–16 of the accounting period.
• Very large companies (broadly those with profits over £20 million, adjusted for associated companies and groups) may pay earlier, with instalments spanning months 3–14.
• Group and associated company rules reduce profit thresholds, bringing companies into QIPs sooner.

 

 

3. Online filing and HMRC digital services

 

All company tax returns must be filed online using HMRC-approved iXBRL tagging for both statutory accounts and tax computations. Submissions can be made via HMRC’s Corporation Tax online service or through commercial software.

• Ensure accounts and computations are correctly tagged in iXBRL; mis-tagging can cause rejection or delay.
• Maintain evidence supporting all adjustments and claims within the computation (for example, full expensing, R&D, loss relief).
• Directors remain legally responsible for accuracy and completeness even when using professional advisers.

 

 

4. Late filing penalties and interest charges

 

HMRC imposes automatic penalties for late filing of a company tax return:

• 1 day late: £100 penalty.
• 3 months late: additional £100 penalty.
• 6 months late: HMRC may make a tax determination of the liability and add a penalty of 10% of the unpaid tax.
• 12 months late: a further 10% penalty on the unpaid tax.

 

Repeated late filing (three consecutive late returns) increases the fixed penalties from £100 to £500 each. HMRC also charges late payment interest on Corporation Tax paid after the due date, regardless of whether the return was filed on time. Conversely, HMRC may pay repayment interest where tax has been overpaid.

Penalties and interest are separate from any compliance action: HMRC can still open an enquiry and, if inaccuracies are found, charge further inaccuracy penalties depending on the taxpayer’s behaviour and disclosure quality.

Section B Summary: File the CT600 within 12 months of the period end, and pay Corporation Tax within 9 months and 1 day (earlier via QIPs for large/very large companies). Filing is fully digital with mandatory iXBRL tagging. Late filing triggers automatic fixed and tax-geared penalties, and late payment accrues interest. Robust deadline management is a critical director responsibility.

 

 

Section C: Preparing a Company Tax Return

 

Accurate preparation requires more than lifting figures from statutory accounts. It involves building a defensible computation that reconciles accounting profit to taxable profit, applying the correct treatments for reliefs and allowances, and retaining records that support every material line item. Even where accountants prepare the CT600, directors remain legally responsible for accuracy and completeness.

 

1. Records and bookkeeping requirements

 

Companies must keep sufficient records to support the return and any claims made. This typically includes:

• Sales and purchase records, invoices, receipts, and contracts.
• Fixed asset registers and evidence for acquisitions/disposals.
• Payroll and director remuneration records, benefits, and P11Ds.
• Financing documents (loans, interest calculations, related-party terms).
• Stock listings, work-in-progress valuations, and year-end adjustments.
• Working papers supporting tax adjustments, elections, and computations.

 

Retention: keep records for at least six years from the end of the relevant accounting period, and longer if the return is filed late, HMRC opens a compliance check, or transfer pricing/cross-border transactions are involved. HMRC can request information under its Schedule 36 Finance Act 2008 powers and may charge penalties for non-compliance.

 

2. Calculating taxable profits and adjustments

 

Start with profit before tax per accounts, then adjust for tax purposes. Common adjustments include:

• Adding back disallowable expenditure (for example, business entertaining, certain fines and penalties).
• Replacing depreciation with capital allowances (see “Reliefs and allowances”).
• Adjusting provisions, fair value movements, and impairment charges according to tax rules.
• Loan relationship and intangibles rules for interest, exchange gains/losses, and IP amortisation.
• Transfer pricing for transactions with connected overseas entities; prepare and retain supporting documentation.

 

Ensure the computation clearly reconciles to the accounts, with cross-references to working papers. Consistency across periods is important; explain any changes in basis or method.

 

3. Allowable and disallowable expenses

 

Only expenses incurred wholly and exclusively for the purposes of the trade are deductible. Illustrative items:

• Allowable: salaries and employer NICs, rent and utilities, professional fees, business travel and subsistence (non-luxury, business purpose), marketing and advertising, software and subscriptions.
• Disallowable: client entertaining and gifts, most fines and penalties, depreciation (replaced by capital allowances), dividends and other profit distributions.

 

Maintain evidence of business purpose and allocation, especially for mixed-use costs (for example, mobile phones, home office). Incorrect classification is a common cause of HMRC adjustments.

 

4. Role of reliefs, capital allowances, and losses

 

Optimising reliefs can materially reduce liabilities, but accuracy and eligibility evidence are critical:

• Capital allowances: claim the appropriate pools and rates. From April 2023, companies may access full expensing (100% first-year allowance) on qualifying main-rate plant and machinery, with a 50% FYA for special rate assets, subject to conditions. Structure asset classifications and cut-off to maximise relief.
• R&D relief (merged scheme): for accounting periods beginning on or after 1 April 2024, SME and RDEC rules are largely merged. Qualifying expenditure and rates differ from prior regimes; pre-notification and additional information requirements apply. Ensure competent professional methodology and technical narratives are retained.
• Creative industry reliefs: sector-specific reliefs and expenditure credits are available for eligible film, TV, animation, video games, and related productions.
• Loss relief: consider carry-back, carry-forward, and group relief. Monitor loss restriction thresholds, group arrangements, and the interaction with QIPs forecasts.

 

Document all elections (for example, short-life assets, AIA usage, group relief) within statutory time limits. Review interaction effects (for example, claiming full expensing versus future disposal implications) to avoid adverse outcomes.

Section C Summary: A defendable CT600 rests on robust records, a transparent reconciliation from accounting to taxable profit, and technically correct claims for reliefs and losses. Apply full expensing and the merged R&D regime where eligible, evidence business purpose for deductions, and retain clear working papers to withstand HMRC scrutiny.

 

 

Section D: Strategic Tax Management

 

Beyond meeting statutory filing obligations, effective Corporation Tax management should be integrated into broader financial planning. For business owners and finance directors, this means aligning tax with cash flow, investment cycles, and governance so the CT600 reflects well-controlled, well-evidenced decisions rather than after-the-fact fixes.

 

1. Tax planning considerations for businesses

 

Proactive planning reduces risk and optimises after-tax outcomes. Priorities typically include:

• Group and legal structure: review holding, IP, and trading entities; evaluate group relief capacity; monitor associated company counts affecting Quarterly Instalment Payments (QIPs) and small profits thresholds.
• Capital expenditure timing: stage qualifying purchases to maximise full expensing (100% FYA for main-rate plant and machinery) and 50% FYA for special-rate assets; use the Annual Investment Allowance (AIA) strategically across group entities.
• Intangible and property reliefs: confirm treatment of acquired goodwill and IP; consider the Structures & Buildings Allowance (SBA) for qualifying non-residential construction/improvements.
• Financing and interest: assess deductibility under the corporate interest restriction and loan relationship rules; maintain arm’s-length terms for related-party funding.
• Loss strategy: model carry-back, carry-forward, and group relief; factor interaction with QIPs estimates and forecast disclosure.
• R&D (merged regime): ensure claim notification (where required) and submit the additional information form; maintain competent professional analysis and technical narratives mapped to costs.
• Owner-manager matters: plan director remuneration and dividends; monitor close company rules (for example, s455 charges on loans to participators) and benefit-in-kind reporting.
• Elections and deadlines: diary key windows (for example, capital allowance elections, group relief statements) and retain signed evidence.

 

Tax outcomes should be designed during the year, not reconstructed at year-end. Clear policies and documented elections reduce enquiry risk and support accurate iXBRL submissions.

 

2. Managing cash flow and Corporation Tax liabilities

 

Corporation Tax is a predictable cash cost. Practical steps include:

• Forecasting: update rolling CT forecasts alongside management accounts; revise QIPs profiles promptly when profits move.
• Provisioning: accrue monthly for CT; ring-fence cash ahead of the 9-months-and-1-day payment date for companies outside QIPs.
• Claims timing: align R&D, loss, and capital allowance claims with cash objectives (for example, accelerating a payable credit or reducing instalments lawfully).
• Time to Pay: where short-term difficulties arise, consider an HMRC Time to Pay arrangement with realistic, supportable cash flow evidence.

 

Timely, data-driven revisions to instalment payments limit interest exposure and demonstrate governance.

 

3. Use of professional advisers and accountants

 

Complex transactions (acquisitions, reorganisations, cross-border arrangements, share schemes) often warrant specialist input. External advisers can prepare computations, CT600s, and iXBRL tags, and advise on reliefs and elections, but directors remain legally responsible for accuracy and completeness.

• Agree clear scopes in engagement letters; keep contemporaneous written advice and supporting workings.
• Evidence “reasonable care” (key for penalty mitigation) through documented reviews, checklists, and sign-offs.
• Quality-check iXBRL tagging and cross-referencing from accounts to computations and schedules.

 

Well-managed adviser relationships reduce error risk without diluting internal accountability.

 

4. HMRC compliance checks and audits

 

HMRC can open an enquiry and request records. Core considerations:

• Information powers: HMRC may require information and documents; failure to comply can attract penalties.
• Penalties for inaccuracies: tax-geared ranges depend on behaviour (careless, deliberate, deliberate & concealed) and whether disclosure is prompted or unprompted.
• Governance regimes: large groups may be in scope of the Senior Accounting Officer regime; all businesses should assess procedures addressing the Corporate Criminal Offence of failure to prevent the facilitation of tax evasion.
• Responding to checks: keep a single source of truth pack (computations, workings, evidence for reliefs); correct errors promptly with a full explanation to reduce penalties.

 

Strong record-keeping, consistent methodologies, and prompt, complete responses typically shorten enquiries and reduce sanctions.

Section D Summary: Embed tax within decision-making, not just the year-end. Plan structures, reliefs, and elections in advance; forecast and provision for CT (and QIPs) with discipline; use advisers for complexity while retaining internal ownership; and maintain enquiry-ready documentation to minimise risk and penalties.

 

 

FAQs

 

 

1. What happens if I miss the company tax return deadline?

 

HMRC issues automatic penalties. At 1 day late a £100 penalty applies, at 3 months a further £100. At 6 months HMRC may raise a tax determination and add a penalty of 10% of the unpaid tax; at 12 months an additional 10% applies. Repeated late filing (three consecutive periods) increases the fixed penalties to £500 each. Interest accrues separately on late-paid Corporation Tax.

 

2. Can I amend a company tax return after submission?

 

Yes. A company can amend its return within 12 months of the statutory filing deadline for that period. Amendments can correct errors, adjust claims (for example, group relief, capital allowances), or reflect new information. Keep a clear audit trail of changes and supporting evidence.

 

3. Do small companies have different rules?

 

Core CT filing and payment deadlines are the same. However, small or less complex companies may be outside the instalment regime and may have simpler computations. Relief regimes (for example, the merged R&D scheme from 1 April 2024) contain specific conditions and rates; eligibility depends on facts rather than size labels alone.

 

4. How long should I keep company tax records?

 

Keep records for at least six years from the end of the accounting period, and longer if the return was filed late, HMRC has opened a compliance check, or transfer pricing/cross-border issues are present. HMRC can request information and documents and may charge penalties for failures to keep or produce records.

 

5. What is the difference between filing and payment deadlines?

 

The filing deadline is 12 months after the period end. The payment deadline is generally 9 months and 1 day after the period end (earlier for companies within Quarterly Instalment Payments). Payment therefore falls due before the filing deadline.

 

6. What reliefs most commonly reduce my CT bill?

 

Common items include full expensing (100% FYA for qualifying main-rate plant and machinery from April 2023), 50% FYA for special-rate assets, the merged R&D regime for periods beginning on or after 1 April 2024 (subject to notification and additional information requirements), Structures & Buildings Allowance, creative sector credits, and group/loss reliefs. Each requires eligibility and evidence.

 

 

Conclusion

 

For business owners and finance directors, the CT600 is not a box-ticking exercise. It is the formal statement of your taxable profits, supported by tagged accounts and computations, and governed by strict deadlines. Embed tax into decision-making during the year, not just at year-end: plan structures and elections, forecast liabilities (and QIPs where applicable), and retain enquiry-ready evidence. Doing so reduces penalties and interest, supports cash flow, and demonstrates robust governance if HMRC opens a check.

 

 

Glossary

 

Term	Definition
Accounting Period	The period for which Corporation Tax is assessed; cannot exceed 12 months and may differ from the Companies House reporting period.
CT600	The company tax return submitted to HMRC, usually accompanied by tagged accounts and tax computations.
Full Expensing	From April 2023, a 100% first-year allowance for qualifying main-rate plant and machinery, with 50% FYA for special-rate assets (conditions apply).
iXBRL	Tagging format required for digital filing of company accounts and tax computations with HMRC.
QIPs	Quarterly Instalment Payments regime requiring certain large and very large companies to pay CT in-year by instalments.
R&D (Merged Scheme)	From periods beginning on or after 1 April 2024, the SME and RDEC regimes are largely merged with revised conditions and information requirements.

 

 

Useful Links

 

Resource	Link
GOV.UK: File your company tax return	Visit GOV.UK
GOV.UK: Company tax return (CT600) guidance	Visit GOV.UK
GOV.UK: Corporation Tax deadlines	Visit GOV.UK