Companies – Tax administration Flashcards
Tax returns Late filing penalty Payment of tax Penalties for errors, late notification and failure to keep records (24 cards)
When must a company file a tax return (CT600)?
By the later of 12 months after the end of the accounting period or 3 months from the notice to deliver.
How must CT600s be submitted?
It will be split into two chargeable accounting periods and a tax return must be submitted for each.
What is the late filing penalty for a company tax return?
1 day late: £100
3–6 months late: Additional £100
6–12 months late: Additional 10% of unpaid tax
Over 12 months late: Another 10% of unpaid tax
How is ‘unpaid tax’ defined for late filing penalties?
Tax payable for the accounting period that remains unpaid 18 months after the period ends.
Golden Ltd filed its return 9 months late. What is the penalty?
£100 (1 day late)
£100 (3–6 months late)
10% of unpaid tax as of 30 June 2026
When must a large company pay corporation tax?
In four quarterly instalments beginning 6.5 months into the accounting period.
What defines a ‘large’ company for corporation tax purposes?
Annual profits exceeding £1,500,000 (time apportioned for short periods).
How are quarterly payments calculated for large companies?
Each instalment is 25% of the estimated total tax liability, updated each quarter.
What happens if instalments are underpaid?
Interest is charged by HMRC on the shortfall, calculated cumulatively and daily.
What happens if a company overpays tax?
HMRC pays interest on the overpaid amount.
When is a small company’s corporation tax due?
9 months and 1 day after the end of the accounting period.
What defines a ‘small’ company for corporation tax purposes?
Annual profits under £1,500,000 for a full year.
When is tax due for a company with a 31 December 2024 year end and small profits?
1 October 2025.
If a company’s CAP is 9 months long, what is the large company threshold?
£1,125,000 (£1.5m × 9/12).
When can a company avoid paying corporation tax by instalments, even if considered ‘large’?
If it is the first year it is large, and either the liability is under £10,000 or the profits do not exceed £10 million
When must a company notify HMRC that it has become chargeable to corporation tax?
Within 3 months of starting to trade
What is the maximum penalty for failing to keep adequate accounting records?
£3,000 for each accounting period
For how long must a company retain its accounting records?
Until the later of:
Six years from the end of the accounting period
The date any enquiries are completed
The date after which an enquiry may no longer be commenced
What is the deadline for HMRC to open an enquiry into a company’s tax return?
12 months from the submission date of the return
What is the automatic penalty if a company fails to produce documents requested by HMRC during an enquiry?
£300, plus £60 per day until the documents are produced
How long does a company have to appeal the result of a tax enquiry once it ends?
30 days
What is the penalty for a careless error (failure to take reasonable care)?
Maximum penalty: 30% of potential lost revenue (PLR)
Reduced to:
0% if unprompted
15% if prompted
What is the penalty for a deliberate error (not concealed)?
Maximum penalty: 70% of PLR
Reduced to:
20% if unprompted
35% if prompted
What is the penalty for a deliberate and concealed error?
Maximum penalty: 100% of PLR
Reduced to:
30% if unprompted
50% if prompted
