Corporate Tax Planning
Corporate Tax Services by Smooth Accounting
The joy of having a business is almost better than the joy of having kids (jokes). When you start your own business, it almost feels like it’s your baby because of all the time, care and money you invest into keeping it active, healthy and alive. As with having children, there can be teething pains, and Corporation Tax can prove just as tricky because you don’t want to end up paying more than you need to – or worse – not enough and end up with a hefty fine.
You don’t get a bill for Corporation Tax from HMRC. Instead, you’ll need to keep accounting records and prepare your own company tax return. If you’ve got any questions just give us a ring, but in the meantime, we’ve produced a little guidance below.
What is Corporation Tax?
Corporation Tax is paid to HMRC out of any profits your business has made, as well as any profits made from company investments. It differs from personal income tax as there are no personal allowances for Corporation Tax.
Who pays Corporate Tax?
Any active UK limited companies that have made a profit will need to pay Corporation Tax. Public Liability Companies (PLCs), unincorporated associations, and some clubs and membership organisations will also need to pay Corporate Tax. If you’re not sure which category you fit into, then please check – better to be safe than sorry.
Why is Corporate Tax planning important?
The aim is simple: Corporate Tax planning helps you reduce your tax liability and improve your profitability. On a deeper level, Corporate Tax planning ensures you’re compliant, in control of your company’s finances, and are able to maximise tax relief or tax credits where available.
If you’re not keeping record of how much Corporate Tax you’re paying, how can you find out if there are more tax-efficient ways to increase your profit? Wealth isn’t as simple as ‘make more sales = make more money’, which is why careful Corporate Tax planning should be woven into your financial objectives.
How much is Corporate Tax?
For the financial year 6th April 2020 to 5th April 2021, the Corporation Tax rate is 19%.
What do Corporate Tax Planning services include?
We help you pay the right amount of Corporation Tax, and not a penny more. We’ll also help you pay Corporation Tax on time and inform you of any ways in which you can take advantage of industry specific tax reliefs available.
Most importantly, your Corporate Tax planning will ensure that everything is ticketyboo in the tax arena; compliance first people. You must pay your Corporate Tax as it’s a legal requirement, but we’ll make sure this is as smooth as possible.
How is corporate tax calculated?
Calculators at the ready. Take your profit, divide by 100, then multiply by 19. The remaining number is how much Corporation Tax you’ll need to pay. Not quite but it will give you an idea. Us accountants usually have to make a few adjustments to arrive at the correct figure.
It’s worth speaking to your accountant to make sure everything has been calculated correctly before submitting anything to HMRC.
Contact Smooth Accounting for payroll advice
By investing in Corporate Tax planning now, you won’t need to dread paying Corporation Tax in the future. You will know, with every fibre in your body, that you’re paying in the most tax-efficient way possible. An error on a company tax return can be expensive and tricky to unravel afterwards.