Corporation tax: a guide for SMEs

As a small business owner, you’ll have to navigate your way through several pieces of tax legislation – one of which is Corporation Tax.

The levy hit the headlines recently, after it was revealed that Facebook has been attacked again about how much Corporation Tax it paid last year. The company paid just £4,327 in 2014, despite rewarding staff with £35.4 million on bonuses.

While Facebook was quick to point out that it complied fully with UK tax legislation, ministers accused the company of taking “the letter of the law to get around the spirit of the law”. Meanwhile, the Taxpayers’ Alliance said that the real problem was caused by the UK’s “complex tax code”.

Corporation tax

What is Corporation Tax?

All businesses are charged Corporation Tax on any profits they make. This is whatever money the company has left over once its expenses have been deducted from its turnover.

If the business has a turnover of £500,000 and has £100,000 in expenses, it would be charged Corporation Tax at a rate of 20% on the remaining £400,000.

When is it due?

Corporation Tax payments need to be made to HMRC within nine months and one day of a company’s year end. This means that if a firm’s accounting period ends on 30th June; its payments would be due on 1st April the following year.

What’s more, the company needs to file a CT600 tax return every year – due 12 months after its accounting period ends.

Can ClearSky Business help?

As a small business owner, we understand that you might not have the time in your busy schedule to get your head around the various pieces of tax legislation. That’s why our experts are on hand to help you every step of the way.

Our dedicated accountants can remind you of any upcoming deadlines, ensuring you remain whiter than white at all times.

For more information, please call 08000 149 597 or email info@clearskybusiness.co.uk.

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