Corporation tax considerations for start ups

POSTED: 19th December 2012
IN: Guides

It can be a challenging prospect to start up a new company and there are a lot of considerations to take into account before you can expect business to boom.

Getting all your organisation's tax obligations organised ahead of time is vital for avoiding any mishaps with HM Revenue and Customs (HMRC).

Small and medium-sized enterprises that may be subject to corporation tax include limited companies incorporated in the UK and foreign-based firms with a permanent business in the country.

Sole traders, limited liability partnerships and traditional partnerships, on the other hand, are not subject to corporation tax.

Once you have identified that your firm does indeed qualify for corporation tax, you should be prepared to pay outstanding tax and file a company tax return ahead of the deadline.

Getting ahead with you tax returns and staying on top of changes will also ensure your business is complying with the rules set out by HMRC.

It is vital you inform the tax office that your organisation has become active within three months of the business getting off the ground.

It is not enough to simply pay corporation tax as you also have to expressly inform HMRC of your company's obligation to do so.

A company tax return must be filed within 12 months of the end of your organisation's corporation tax accounting period, which is typically the end of your financial year.

You must also ensure that corporation tax on any profits that are taxable are paid within nine months and one day of the end of your corporation tax accounting period.

If your business receives a 'Notice to deliver a company tax return' when the company is dormant, or inactive, it is necessary to submit a company tax return within the given deadline above.

As HMRC points out, almost all companies are required to submit their company tax returns online, which should help speed up the process so your organisation can begin to strengthen. 

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