Tax | Daykin Scott Accountants

CORPORTATION TAX RETURN(CT600)

The Corporation Tax Return (CT600) is a vital document for UK Limited Companies. This mandatory form must be submitted to HMRC within 12 months of your company's financial year-end.

Before filing the CT600, ensure your company is registered for corporation tax with HMRC. This involves notifying HMRC that your company is subject to corporation tax. Once registered, you'll need to determine your company's taxable profits for the accounting period.

The CT600 must be filed within 12 months of the year-end, but tax payments are typically due within nine months and one day. To avoid penalties, it's crucial to adhere to these deadlines.

Penalties for late filing of the CT600

Missing the CT600 deadline can lead to significant financial penalties:

One day late: £100 penalty
Three months late: Additional £100 penalty
Six months late: 10% of the estimated corporation tax bill
Twelve months late: Another 10% of the estimated corporation tax bill

WE DELIVER

WORLDWIDE

At Daykin Scott, we offer a comprehensive range of corporation tax services designed to help businesses minimise their tax liabilities and ensure compliance with HMRC regulations.

Our experienced tax professionals can provide the following:

TAX RETURN PREPARATION

We'll accurately complete your corporation tax return, ensuring that you're taking advantage of all available deductions and reliefs.

TAX INVESTIGATIONS

If you're facing an HMRC investigation, we can provide expert representation and support to help you navigate the process.

TAX PLANNING

Our experts can help you devise effective tax planning strategies to reduce your overall tax burden. This might involve considering factors like capital allowances, research and development tax relief, and group relief.

TAX ADVICE

We'll accurately complete your corporation tax return, ensuring that you're taking advantage of all available deductions and reliefs.

HOW WE CAN HELP

FREQUENTLY ASKED QUESTIONS

The current corporation tax rate in the UK is 25%. However, this rate can be reduced through marginal relief for small companies with profits between £50,000 and £250,000. Marginal relief creates a lower tax band with a rate of 19% for profits within this range. This helps to smooth the transition to the higher corporation tax rate as a company's profits grow.

To determine your corporation tax liability with marginal relief, you can utilise the handy calculator provided by HMRC on their website:

https://www.tax.service.gov.uk/marginal-relief-calculator

VALUE ADDED TAX (VAT)

VAT is a tax levied on goods and services in the UK. It's generally charged at a rate of 20% on most items, but there are exceptions:

Reduced rate (5%): Applies to certain energy, heating, and protective products.
Zero rate (0%): Used for items like children's clothing, books, and most food.
Exempt: Some items, such as financial services and property transactions, are exempt from VAT.

Businesses with a turnover exceeding the VAT registration threshold (currently £90,000) must register for VAT. This means they collect VAT from customers and then pay it to the government.

Making Tax Digital (MTD) is a government initiative requiring businesses to keep digital records and file VAT returns using software that is compatible with HMRC's systems. This has significant implications for VAT compliance:

Digital Records: Businesses must keep digital records of sales, purchases, and VAT.
Compatible Software: VAT returns must be filed using software that meets HMRC's MTD requirements.
Quarterly Returns: VAT returns must be filed quarterly, even for businesses with a turnover below the VAT registration threshold.

MAKING TAX DIGITAL (MTD)

HOW WE CAN HELP

At Daykin Scott, we offer a comprehensive range of VAT services tailored to your specific needs. Whether you're a small business just starting out or an established company with complex VAT obligations, we can provide expert guidance and support.

VAT REGISTRATION

Assisting businesses in registering for VAT, ensuring compliance with HMRC regulations, and optimising VAT planning.

MTD COMPLIANCE

Assisting businesses in implementing Making Tax Digital (MTD) for VAT, ensuring compliance with HMRC's digital record-keeping and reporting requirements.

VAT RETURN PREPARATION

Accurate and timely preparation of VAT returns, including quarterly and monthly submissions, to avoid penalties.

VAT CONSULTANCY

Providing expert advice on VAT matters, including changes in VAT rates, regulations, and best practices, to help you minimise your VAT liability.

FREQUENTLY ASKED QUESTIONS

CAPITAL GAINS TAX (CGT)

Capital Gains Tax (CGT) in the UK is a tax on the profit made when you dispose of an asset that has increased in value. This includes assets such as residential property, shares and securities, collectibles (e.g., art, antiques), and business assets.

The rates of CGT depend on your total taxable income and the type of asset you're selling. For the tax year 2024/25, basic-rate taxpayers pay 18% on gains from residential property and 10% on gains from other chargeable assets. Higher-rate and additional- rate taxpayers pay 24% on gains from residential property and 20% on gains from other chargeable assets. .

There is also an annual exempt amount, which is the amount of gains you can make each year before you have to pay CGT. For the tax year 2024/25, the annual exempt amount is £3,000.

RESIDENTIAL PROPERTY

If you sell a UK property that hasn't always been your main residence, you'll typically need to pay Capital Gains Tax (CGT) on any profit you make. However, Principal Private Residence Relief (PPRR) can potentially exempt part or all of your gain from CGT. PPRR applies if the property has been your main home for a certain period. Remember, you must report any gain to HMRC within 60 days of the sale being completed.

SELLING A BUSINESS

When selling a business, you might be eligible for Business Asset Disposal Relief (BADR), which can significantly reduce the Capital Gains Tax (CGT) you owe. Formerly known as Entrepreneur's Relief, BADR is a tax relief designed to encourage investment and entrepreneurship. To qualify for BADR, you typically need to have owned and been actively involved in running the business for at least two years, and the business must meet certain criteria, such as being a trading company or a partnership. If you qualify for BADR, you can benefit from a reduced CGT rate of 10% on qualifying gains. However, there is a lifetime limit on the amount of gains that can be eligible for this reduced rate.

HOW WE CAN HELP

At Daykin Scott, we specialise in helping businesses minimise their CGT liabilities and stay compliant with HMRC regulations. Our expert team offers a comprehensive range of services, including:

TAX RETURN PREPARATION

We'll accurately complete your capital gain tax return, ensuring that you're taking advantage of all available deductions and reliefs.

TAX INVESTIGATIONS

If you're facing an HMRC investigation, we can provide expert representation and support to help you navigate the process.

TAX PLANNING

We'll develop personalised strategies to reduce your CGT liability, considering factors like asset structure, timing, and reliefs.

RELIEFS AND EXEMPTIONS

We'll identify and claim eligible reliefs to minimise your CGT burden, providing expert guidance and support.

FREQUENTLY ASKED QUESTIONS

PERSONAL TAX

Personal tax is the tax that individuals pay on their earnings in the UK. If you're a UK resident and you receive untaxed income or your income exceeds certain thresholds, you're generally subject to self-assessment. This process involves declaring your income and calculating your tax liability. The most common reasons why people need to register for self-assessment are:

SELF-EMPLOYMENT

PARTNERSHIP INCOME

RENTAL INCOME

CAPITAL GAINS

DIVIDENDS

FOREIGN INCOME

TAX RESIDENCY

Tax residency is a critical factor in determining your UK tax obligations. If you're considered a UK tax resident, you're generally liable for to UK tax on both your UK and worldwide income and gains. Several factors are considered when determining UK tax residency. These include:

Physical presence: The number of days you spend in the UK.
Habitual residence: Where you have your usual home.
Demonstrable ties: Your connections to the UK, such as employment, property ownership, or family.

HOW WE CAN HELP

At Daykin Scott, we are committed to helping individuals minimise their personal tax liabilities and ensure compliance with HMRC regulations. Our experienced team provides a wide range of services, tailored to your specific needs, including:

TAX RETURN PREPARATION AND SUBMISSION

Individuals: We prepare and submit annual tax returns for individuals, including self-employed individuals and those with rental income.

Partnerships: We also assist partnerships in filing their tax returns.

TAX ADVISORY

Our tax advisory services provide comprehensive guidance on various tax matters, including:

Income Planning: We help individuals and businesses optimise their income to minimise tax liabilities. This includes strategies such as salary vs. dividend payments, pension contributions, and capital gains tax planning.
BTL Property Structuring: We assist landlords in structuring their buy-to-let property investments to minimise tax burdens. This involves considering factors such as ownership structures, financing options, and claiming allowable expenses.
Advisory on Tax Regulations: We stay up-to-date with the latest tax regulations and provide expert advice on their implications for our clients. This includes guidance on changes in tax rates, allowances, and reliefs.

FOREIGN TAXATION

Our foreign taxation services address the complex tax implications of international activities. We can assist with:

Determining UK Tax Residency: We help individuals establish their UK tax residency status, considering factors such as physical presence, habitual residence, and the nature of their ties to the UK.
Non-Resident Tax Returns: We assist non-UK residents in filing their UK tax returns, ensuring compliance with reporting requirements and calculating any tax liabilities.
Double Taxation Relief: We help individuals claim double taxation relief to avoid paying tax on the same income in both the UK and a foreign country. This involves understanding the applicable double taxation agreements and preparing the necessary documentation.

FREQUENTLY ASKED QUESTIONS

If you fail to submit your Self-Assessment tax return by the deadline, you may face the following penalties:

Initial fine: A fixed penalty of £100.
Increasing fine: The penalty increases by £10 per day, up to a maximum of 90 days (£900), for each day the return remains outstanding. Following this, if your return is still outstanding after 6 months, there will be an additional fine of 5% of tax due or £300, if greater. Failure to file within 12 months will lead to a further fine of 5% of tax due or £300, if greater.
Daily interest: You will be charged interest on any tax you owe, calculated daily from the due date of the return.