This information is for a small private company near to or just past the deadline. Public companies and large companies have other deadlines which your accountant will advise you of.
If you are running a company, then it is advisable first of all to engage professional accountants to prepare the accounts and any corporation tax return that is needed, and to deal with Companies House and HM Revenue & Customs.
If your accounts have not been received at Companies House by the deadline, then you need to pay a Late Filing Penalty of £150. Note that we say “received”. If the accounts were sent by a service such as the Royal Mail’s Special Delivery Guaranteed just before the deadline, their non-arrival incurs the penalty. If you complain then the message from Companies House will usually be “tough luck!” unless the circumstances really are exceptional. Your loss of £150 is a “consequential loss” and your carrier is likely to have excluded this unless you asked for consequential loss cover explicitly. “Guaranteed” means that you might get your postage fee back (a few pounds) plus the value of the contents (a few pennies). Try to be on time next year.
Your company records at least should be in the possession of your accountant by now. Try to avoid the next penalty of an additional £225 that will be incurred once you are more than a month overdue, making a total of £375. There is still something to play for.
If you are more than three months late, the total penalty climbs to £750, and more than six months late means a total penalty of £1,500. If you are late two year’s running, then any penalty will be doubled. That could be as much as £3,000. The penalty notice will be sent after the accounts are actually filed.
After the accounts are submitted, it takes Companies House about a week to process them, depending upon the time of year. You may look for the company entry on the Companies House website and it will be apparent when the accounts have been processed.
A payment of corporation tax may be due nine months and one day after the year end, or at about the same time as the accounts are due. Strictly speaking this is merely a payment on account so no penalty as such is incurred, but you will need to pay interest on a commercial basis if the nine month and a day limit is exceeded. Your accountant may estimate the payment to be made and advise you to pay it at once. If you overpay then the excess will be refunded to you automatically in due course.
Any penalty you pay is not tax-deductible since it does not relate to a trade. Any interest you pay is tax-deductible (see below).
Normally you will sign and return the corporation tax return form CT600 at the same time as the accounts. The form itself is submitted electronically by your accountant along with a full set of accounts in a special format known as iXBRL. The deadline for this is up to one year after the accounts year end, and there is another range of penalties for late submission of the CT600 starting at £100.
The Other Way
A corporation tax loss can be carried back to the previous year in order to claim a refund. So what happens if you submit everything in good time, and then hear nothing? Your accountant can visit HMR&C’s website and check to see if they have the same view of your company’s tax position as you do, and sort it out with a telephone call if not. The refund normally takes four to six weeks to come back, but your accountant may get a little advance warning of this from the website and reassure you that the payment is on its way. You may get a bit of interest on a commercial basis with your repayment. This interest is taxable. HM Revenue & Customs are trying to be fair here. As we said above, interest you pay them is tax-deductible, although it will be at a higher rate than interest they pay you.
You need to authorise your accountant as a corporation tax agent using form 64-8 in order for your accountant to be able to ascertain your tax position from the website. If you signed a 64-8 a long time ago, you may be requested to do it again to force HMR&C’s computer system to recognise you.
31st March year ends
Your accounts are due at Companies House by 31st December. Generally the postal service before Christmas is slow, and most places are shut over Christmas. Bad weather will not be accepted as an excuse for late submission of the accounts. You should hand in your records to your accountant a bit earlier to anticipate all this, and remember that if your accountant asks for you more information such as a hire purchase agreement, then the postal service will be slow.
New companies
The accounts submission deadline date for new companies is usually a little different from the nine-month-after-the-year-end date due to a rather literal interpretation of the 2006 Companies Act being applied by Companies House. Your accountant will advise you when it is, but you can look it up on the Companies House website if you wish. Otherwise the rules are the same.
What we do
If your company records are processed by David Porthouse & Co, then your bank statements will be scanned by optical character recognition. Information from cheque book stubs will be entered by our super-autocomplete system, and subsequent processing will be all-electronic with no re-keying of data, no duplication of effort and no redundancy. A set of company accounts is also a literary work, for which we have a stock of text which we can copy, paste and re-edit to suit. All this technology enables us to prepare a set of company accounts quickly in an effort to meet the deadline. The stock of text we use is freely available to other accountants by clicking on this link.