Corporation Tax

Expert Corporation Tax Services for Optimal Financial Outcomes

At Apex Accountants, we provide a comprehensive range of corporation tax services designed to ensure your business meets all corporation tax obligations efficiently and accurately. Furthermore, our dedicated team of professionals offers tailored solutions to fit your unique business needs. By leveraging our expertise and advanced technology, we not only simplify the corporation tax process but also ensure compliance and optimisation of your tax position. 

Our proactive approach not only addresses current obligations but also prepares your business for future growth. We believe in building long-term relationships with our clients, providing continuous support and guidance throughout. 

Our Services 

  • Registration: We manage the entire process of registering your company for HMRC corporation tax. 
  • Tax Return Preparation: Our experts handle the preparation and filing of your annual tax returns, ensuring compliance with current regulations. 
  • Corporation Tax Relief: We identify and apply relevant tax reliefs, such as R&D credits and the Annual Investment Allowance, to minimise your tax liabilities. 
  • HMRC Investigations: We offer robust support during HMRC corporation tax investigations, ensuring your interests are protected. 
  • Tax Planning: Our corporation tax advisors provide strategic tax planning to optimise your tax position and uncover future savings opportunities. 

Technology Integration 

We harness advanced technology to streamline our corporation tax services: 

  • Cloud-Based Accounting Software: This tool ensures real-time access to your financial data, enabling us to offer up-to-date advice. 
  • Automated Workflows: These enhance efficiency in data collection and processing, reducing manual errors. 
  • Secure Client Portals: These platforms facilitate safe document sharing and communication. 

Comprehensive Support 

Our approach guarantees thorough support for businesses. Specifically, we provide customised advice, timely reminders for key deadlines, and proactive strategies for tax efficiency. Moreover, by integrating technology, we make tax compliance simpler and more transparent. Consequently, this allows you to focus on expanding your business. 

Corporation Tax Advisory Services  

At Apex Accountants, we offer robust advisory services focused on strategic tax planning to help businesses navigate complex corporation tax regulations and optimise their financial outcomes. 

Our Corporation Tax Advisory Services 

Entity Choice 

We assist in choosing the most tax-efficient structure for your business. Specifically, whether it’s a limited company, partnership, or sole trader, our advice ensures you start on the right foot. Our team evaluates your business goals and industry-specific factors to recommend the ideal structure. This is crucial for minimising corporation tax liabilities and compliance requirements. 

Capitalisation Planning 

Moreover, our experts guide you in financing your business effectively. We help balance debt and equity to minimise tax liabilities and enhance financial stability. Effective capitalisation planning includes analysing various financing options and understanding their tax implications. Consequently, this ensures your business remains financially robust. 

Tax Credits Exploration 

Additionally, we identify and secure eligible tax credits, such as R&D credits and the Annual Investment Allowance. By doing so, we reduce your taxable income and boost investment capacity. By thoroughly understanding your business activities, we uncover opportunities for significant tax savings. 

Benefits of Our Corporation Tax Services 

Minimising Liabilities 

By leveraging tax reliefs and allowances, we help you reduce your tax burden significantly. For instance, this includes utilising the Annual Investment Allowance for immediate deductions and exploring the Super Deduction for enhanced relief on investments. 

Compliance and Efficiency 

Furthermore, we ensure accurate and timely tax submissions, thereby avoiding penalties. Our use of advanced technology, such as cloud-based software and automated workflows, streamlines data processing and enhances accuracy. 

Proactive Planning 

Finally, our strategic planning aligns with your business goals. We advise on deferring income, accelerating expenditure, and utilising provisions to maximise tax efficiency. Our proactive approach helps you stay ahead of changes in tax laws and regulations. 

Strategic Corporation Tax Planning 

With Apex Accountants, you receive tailored support that ensures compliance and fosters growth through strategic tax planning. Corporation tax efficiency is vital for limited companies. By understanding and claiming allowable expenses and tax reliefs, businesses can reduce taxable income and overall tax liability. 

Allowable Expenses 

Allowable expenses reduce taxable profits. Common examples include: 

  • Salaries and Wages: Payments to employees, including bonuses and benefits, are deductible. 
  • Rent and Utilities: Costs for office space and utilities. 
  • Office Supplies: Items such as stationery and software. 
  • Professional Fees: Fees for accountants and solicitors. 
  • Travel and Subsistence: Costs for business travel and accommodation. 
  • Marketing and Advertising: Expenses for promoting the business. 

Corporation Tax Reliefs 

Key reliefs that reduce your tax burden include: 

  • Annual Investment Allowance (AIA): Deducts the full value of qualifying capital expenditure up to £1 million annually. 
  • Research and Development (R&D) Tax Credits: SMEs can claim up to 230% of qualifying R&D costs. 
  • Super Deduction: Provides 130% first-year relief on qualifying plant and machinery investments. 

Strategic Planning Example 

A company with a profit of £300,000 invests £200,000 in new machinery. By claiming the Super Deduction, they can deduct £260,000 from their taxable income, reducing their taxable profit to £40,000 and significantly lowering their corporation tax liability. 

Directors’ Key Responsibilities 

Directors play a crucial role in managing corporation tax. They must ensure compliance with tax regulations, including submitting the annual CT600 form within 12 months of the end of the accounting period. Additionally, maintaining accurate financial records and ensuring timely payment of any HMRC corporation tax owed is essential to avoid penalties. 

Current Tax Rates and Thresholds 

As of the current tax year, the standard corporation tax rate is 25% for companies with profits over £250,000, while the small profits rate is 19% for profits of £50,000 or less. Marginal relief applies to profits between these thresholds. 

Example Calculations 

  • Example 1 

 A company with £40,000 in profits pays 19%, equating to £7,600. 

  • Example 2 

Another business with £300,000 in profits pays 25%, equating to £75,000. 

  • Example 3 

 with £100,000 in profits will have a marginal relief calculation, resulting in an effective rate between 19% and 25%. 

Upcoming Changes 

From April 2025, the standard rate will increase to 26%, and profit thresholds will adjust for inflation. Staying updated with HMRC announcements is crucial for optimal tax planning. 

How to Calculate Taxable Profits 

To calculate taxable profits, determine total income and deduct allowable expenses. Corporation tax reliefs, such as R&D credits, should also be considered. 

Example Calculation 

  • Total Income: £500,000 
  • Deductible Expenses: £230,000 
  • Capital Allowances: £20,000 
  • Taxable Profit: £250,000 

Late Filings and Payments 

Late filings and payments can lead to significant penalties. Ensure timely filings and payments to avoid: 

  • Penalties for Late Filing: £100 fixed penalty for 1 day late, additional £100 after 3 months, and 10% of the unpaid tax after 6 and 12 months. 
  • Penalties for Late Payment: 5% of the unpaid tax after 30 days, with an additional 5% after 6 and 12 months. 

Enforcement Actions 

HMRC may take enforcement actions, including seizing assets and legal proceedings. Timely compliance is crucial for maintaining financial stability. 

Tax Reliefs and Allowances 

Understanding and utilising tax reliefs, such as the AIA, R&D credits, and Super Deduction, can significantly reduce corporation tax liabilities and encourage investment. 

At Apex Accountants, our corporation tax services are specifically designed to optimise your financial outcomes and ensure compliance with all regulatory requirements. For expert advice on corporation tax, including HMRC corporation tax issues, we encourage you to contact our corporation tax advisors. Our team is committed to helping you navigate the complexities of corporate tax compliance and, in turn, maximise your tax efficiency. By leveraging our expertise, you can efficiently manage your tax obligations and strategically plan for your financial success. 

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Frequently Ask Questions

Corporation Tax is a tax on the profits of limited companies and other organizations, such as clubs, societies, and associations. Any company operating in the UK, whether it's based domestically or internationally, must pay Corporation Tax on its profits.

As of 2024, the standard Corporation Tax rate is 25% for profits over £250,000. For profits below this threshold, a lower rate of 19% applies. These rates are applicable to all qualifying businesses in the UK.

The AIA allows businesses to deduct the full value of qualifying capital expenditures, up to £1 million, from their taxable profits. This includes investments in plant and machinery but excludes buildings and land, thereby reducing the amount of Corporation Tax owed.

The Super-Deduction was introduced to encourage business investment by allowing companies to deduct 130% of the cost of new qualifying plant and machinery from their taxable profits. This provides immediate and substantial tax relief for investments made until March 31, 2023.

R&D tax credits offer businesses tax relief on qualifying research and development expenditures. Small and medium-sized enterprises (SMEs) can claim up to 230% of qualifying costs, while large companies can benefit from the Research and Development Expenditure Credit (RDEC) at 13%. These credits reduce the overall taxable income.

Companies must file their Corporation Tax returns (CT600) online with HMRC within 12 months of the end of their accounting period. The tax payment is usually due nine months and one day after the end of the accounting period.

Penalties for late filings start at £100 for being one day late, increasing to £200 after three months, and further penalties if delays continue. Late payments incur interest, and after six months, an additional 10% of unpaid tax is charged.

Businesses can carry forward trading losses indefinitely to offset future profits, reducing future tax liabilities. They can also carry back losses to the previous year to reclaim tax paid. Group companies can transfer losses to other group members to optimize the overall tax position.

Dividends are taxed at lower rates than salaries and are not subject to National Insurance Contributions (NICs), making them a tax-efficient way to extract profits. Salaries, however, are subject to Income Tax and NICs, resulting in higher tax liabilities but providing a straightforward method of profit extraction.

Corporation tax advisors help businesses navigate complex tax regulations, optimize their tax position, and ensure compliance. They provide strategic planning, identify tax-saving opportunities, and manage risks, ultimately enhancing profitability and ensuring businesses avoid costly penalties.

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