What is a Company Tax Return, CT600? A Company Tax return details the Corporation Tax payable to HMRC. It consists of a completed CT600 form plus information, accounts, computations, statements and reports which the company has drawn up.
What is CT600?
A CT600 return records for each tax year for corporation tax purposes; the amount and type of profits made during the year, together with their assessable income, together with the allowable expenses and the tax payable. The figures must be confirmed by the chief accounting officer of the company. This is the person responsible for the preparation of the financial statements and tax returns of the company.
CT600: who must submit/ fill in a Company Tax Return?
In the UK, there are a number of companies required to submit a tax return. These companies include companies limited by shares or guarantee, with a main activity not involving the making of any financial returns. These include charities, and any company not based in the UK.
Most companies must submit a CT600 return annually. CT600 is used by almost all companies paying Corporation Tax to HMRC.
CT600 return is not the only return required by HMRC. You may still have to make and submit a net annual return (under Corporation Tax), even if your CT600 is complete. This is if you are carrying on a trade and have an amount of corporation tax due for which you do not have a receivable at the end of the tax year
Who must submit a CT600 return?
According to the guidance notes, a Company Tax return must be submitted within 16 months of the Companies end of the accounting reference date, and it should be submitted on the day the main return is due.
The Companies Act (1988) sets out the purpose of filing an annual tax return with HMRC, and this includes making any payment of corporation tax due. The requirement applies whether or not the company makes a payment in connection with the accounts.
If your company does not file a CT600 return, you may be liable to a penalty, and a financial penalty is imposed if you do not declare all taxable profits on your CT600 return.
A CT600 return must also be submitted by a parent of a controlled subsidiary if the company does not file a CT600 return within time.
Below is a list of “duty holders” (one cannot be liable to penalties if they are not aware of the duty to file a Return for Corporation Tax).
You do not need to fill out a CT600 return – the correct date for filing is fixed by the Companies Act and cannot be missed. If the company is not filing, the duty holder should be filing on time or obtaining an extension to file for an extra six months.
Section 3199 of the Companies Act, for its part, stipulates that:
“Every company shall submit in accordance with this Act an annual return of its profits of the tax year within the period of 16 months from the end of that year.”
To state the obvious, it is crucial to fill out a CT600 return within its stated deadline. Otherwise, the company will be liable to fines and penalties.
What happens if a CT600 return is not filled out on time?
Once the financial year for the Corporation Tax has ended, there are various penalties the company can be subject to. This is especially true if the Company Tax return is not submitted in time or if it includes incorrect information.
An initial penalty will apply if the company fails to file a CT600 return before the due date. This may be a lower penalty if the return is filed before the effective end of the period for filing a return.
This penalty is lower than the penalty applied if the CT600 return is not filed at all. The rate of penalty rises from 10% to 5% of the amount payable. After an initial assessment, payment is 5% of the amount payable.
If there is an apparent intent to delay the return (maybe to evade the payment of tax, part of it or any fines), or if the filing is due for a second time in succession, then the penalty is 20%. After an assessment, the penalty is 5% of the amount payable.