Are looking for the perfect guide on paying for your corporation tax?
A corporation tax is basically imposed on the net income of a certain company. If you are about to set up a business as a limited company contractor, then your company will be then liable for paying contractor corporation tax on any profits it does.
Your company or the company you are in will need to assess its corporation tax liability on such an annual basis. They also have to pay any tax they owe to HMRC. there will also be consequences like, you will be penalized if you submit your contractor corporation tax return on late, or if it has minimal errors.
But fret not, today this blog post will be your guide in knowing what to do with your corporation tax.
Register Your New Business
When you are on a new business venture, it is important that you inform the higher state offices and organizations like HMRC that the company has been set up and is liable for paying contractor corporation tax. You must inform them within 3 months of doing business activities and services.
Self- Asses the Business
Every year, a company should receive a notice from the HMRC in filing for a company tax return. Although the accountant will be responsible for doing the calculations, it is ultimately your responsibility to ensure it is filed correctly, on time and having all the necessary documentation and information.
About Company Tax Returns
Basically, all company tax returns will contain the name of your company and your company’s registration number. The registered office address and tax reference number will also be asked.
Contractor Tax Rates
It is inevitable that companies from all sizes, big, small, or even startups, pay the same rate of contractor corporation tax. As of the latest update from April 2018, corporation tax is currently 19%.
Usually, there are two rates of corporation tax, the main rate, and the ‘small profits rate’ for companies with profits of £300,000 or even lesser. Profits between £300,000 and £1.5m are subject to a more complex system of marginal relief for taxes. Later on, during the year 2016, the two rates of corporation taxes are then equalized.
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