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Tax computations are statements that show annual tax adjustments to the accounting profit of companies that require supplementary evidence for their tax matters. Examples of tax adjustments include: non-taxable receipts, non-deductible expenses, capital allowances or additional deductions. Usually, these types of computations are of tax payable with those requiring more intricate tax affairs. As a result, they are typically handled by the taxpayer or their chosen specialist accountant, like Nordens. Once completed, the tax computations are then usually submitted to the appropriate tax authority as supplemental material, which supports a uniform summary tax return, such as a UK Corporation Tax Return.
Corporation Tax computations are an accurate way of calculating the adjusted profits for Corporation Tax purposes. However, the procedures for this tend to be complex, and it’s advised that an expert accountant like Nordens manage and complete this on your behalf. Nordens can be trusted to provide high quality support with tax computations that you need to thrive as a business. The primary details found within the Company Tax Return include: specific details about the company; calculations that are based upon due Corporation Tax; capital allowances claim details; the particulars of any losses that have been claimed.
Your statutory accounts must be filed with HMRC, and they will usually comprise of: profit and loss accounts; the director’s report; notes; balance sheet as a statement of your financial standing; Corporation Tax computations. Taxable profits and profits per the accounts regularly produce imbalanced figures. For example, there are figures within the profits for accounts’ purposes which you won’t find inside the profits for Corporation Tax purposes. For a company which yields external accounts, tax computations will generally consist of calculating the taxable profits via summary adjustments of the accounting profits (externally reported), and any extra details and resolutions of figures that appear within the accounts.
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At Nordens, we take pride in supporting you through every entrepreneurial stage you face. Here are all the other things you have to know about Tax Computations:
Companies must have their Corporation Tax Returns filed online through HMRC. Alongside the CT600, the documents that need to be submitted are the Corporation Tax calculations, computations and the accounts. To begin filing online, businesses should register with HMRC and get their user ID and password. It may be a good idea for you to request your accountant’s services to handle this matter for you, on your behalf. In addition, accounts should be filed with Companies House online or through the post (online submissions are not yet compulsory). To make an online submission, businesses will need an authentication code from Companies House. It’s important to note that this is an entirely different one to that from HMRC. However, there is the option of filing jointly through the HMRC website.
If you are confident, experienced, and have the time for preparing and filing your own Company Tax Return, then this is definitely an option. Nonetheless, if you feel any reluctance about doing this job yourself, then it’s worthwhile employing the services of a dedicated accountant. Firstly, check that you have access to utilise the HMRC Corporation Tax filing service online. Here, you can securely submit your Company Tax Return with HMRC, and your accounts via Companies House. If your business is unrepresented and has standard tax affairs, you will be able to use the free HMRC online service for:
• Filing your accounts to Companies House
• Sending your Company Tax Return to HMRC
• Simultaneously sending HMRC your Company Tax Return and Companies House your accounts
• Sending HMRC your accounts and computations (formatted correctly in iXBRL)
You’ll find that there are a variety of deadlines regarding the filing of returns and payments of tax:
• Your Company Tax Returns, along with its potential computations will need to be filed to HMRC inside 12 months, once the relevant accounting period has ended.
• Any owed Corporation Tax should be paid no more than 9 months and a day after the conclusion of the accounting period. This can be done electronically.
For example: If your business has a financial year-end of 31st December 2019, they will need to pay any due Corporation Tax by 1st October 2020, as well as filing the return by 31 December 2020. Normally, however, these items are filed together. Keep in mind that if a Company Tax Return is late in getting filed, then it is likely to face fines.
Your initial statutory accounts will need to be submitted within 21 months after you have registered with Companies House. From that moment forward, you must file your accounts 9 months after your company’s accounting year. Should you make a filing after the deadline has passed, you could receive a fine up to £1,500. This depends on the length of time that your payment was delayed for. If you are running a small business, you won’t need to file a full set of accounts to Companies House. You can opt to submit a shorter, summarised version which condenses the key ideas, and usually doesn’t include the profit and loss accounts. The extended version, however, will need to be sent off alongside your Company’s Tax Return to HMRC and any shareholders.
Any alterations can typically be completed within 12 months of the tax return’s filing date. However, HMRC may still enforce financial penalties for any mistakes made. HMRC can conduct compliance checks to approve the figures that have been submitted are accurate.
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