Every UK limited company must file a Company Tax Return (form CT600) with HMRC, even if the company made no profit or had no trading activity during the period. This is separate from the annual accounts you file at Companies House.
Getting it wrong – or filing late – triggers automatic penalties and interest charges. Here is how to do it properly.
What is the CT600?
The CT600 is the form HMRC uses to assess your company’s Corporation Tax liability. It contains:
- Your company’s taxable income and gains
- Capital allowances claimed
- Any reliefs or deductions (R&D credits, group relief, losses)
- The amount of Corporation Tax due
You do not just send the form on its own. You also need to attach:
- Your statutory accounts in iXBRL (inline eXtensible Business Reporting Language) format
- A Corporation Tax computation showing how you arrived at the taxable profit
Key deadlines
The deadlines are based on your company’s accounting period, not the standard tax year:
| Task | Deadline |
|---|---|
| Pay Corporation Tax | 9 months and 1 day after your accounting period ends |
| File CT600 | 12 months after your accounting period ends |
These are two different deadlines. You need to pay your tax well before you need to file the return. Many business owners confuse the two.
For example, if your accounting period runs from 1 April to 31 March:
- Payment deadline: 1 January the following year
- Filing deadline: 31 March the following year
If your company’s taxable profits exceed £1.5 million, you must pay in quarterly instalments instead. This is called the quarterly instalment payment (QIP) regime.
What you need before you start
Gather everything before you begin the filing process. You will need:
Financial records
- Finalised profit and loss account for the period
- Balance sheet at the period end date
- Bank statements covering the full period
- Records of all income, expenses and transactions
- Details of any dividends paid during the period
Tax-specific information
- Capital allowances computation (AIA, writing-down allowances, structures and buildings allowance)
- Details of any losses carried forward from earlier periods
- R&D tax credit calculations if applicable
- Records of any related party transactions
- Details of any company cars or benefits in kind
Company details
- Your company’s UTR (Unique Taxpayer Reference) – a 10-digit number from HMRC
- Your Companies House registration number
- Your company’s accounting reference date
- Registered office address
Step-by-step filing process
Step 1: Prepare your accounts
Your accounts must comply with UK GAAP (usually FRS 102 or FRS 105 for micro-entities). If you use an accountant, they will prepare these for you. If you prepare them yourself, check that your accounts production software produces them in the correct format.
Step 2: Convert accounts to iXBRL
HMRC requires your accounts in iXBRL format. This is a structured data format that allows HMRC’s systems to read and process your accounts automatically.
Most accounting software and filing tools handle this conversion for you. If you need to do it manually, HMRC provides a list of approved iXBRL tagging software on their website.
Step 3: Prepare your Corporation Tax computation
The tax computation bridges the gap between your accounting profit and your taxable profit. The main adjustments are:
| Adjustment | Direction |
|---|---|
| Depreciation (accounting) | Add back |
| Capital allowances (tax) | Deduct |
| Entertaining expenses | Add back |
| Fines and penalties | Add back |
| Donations to charity | Deduct (as a charge) |
| Non-trading loan relationship credits | Separate computation |
Your taxable profit is what the Corporation Tax rate applies to.
Step 4: Calculate Corporation Tax
Apply the correct Corporation Tax rate to your taxable profit:
| Profit level | Rate |
|---|---|
| Up to £50,000 | 19% (small profits rate) |
| £50,001 to £250,000 | Marginal rate (effective 26.5%) |
| Above £250,000 | 25% (main rate) |
If your company has any associated companies (companies under common control), the thresholds are divided by the number of associated companies plus one.
Step 5: File online
You must file your CT600 online. There are two main ways:
HMRC’s own service:
- Log in to your HMRC business tax account
- Use the Corporation Tax online filing service
- Enter the CT600 data manually
- Attach your iXBRL accounts and computations
Commercial software:
- Most accounting packages can file directly with HMRC
- This is generally faster and reduces errors since the data comes from your existing records
- The software handles the iXBRL conversion automatically
Step 6: Pay your Corporation Tax
Pay using one of these methods:
- Direct Debit – set up through HMRC’s online service
- Online banking – pay to HMRC’s Cumbernauld bank account using your payment reference
- CHAPS – same-day payment through your bank
- BACS – takes three working days
Always use the correct payment reference, which is your 17-character Corporation Tax reference number. If you use the wrong reference, your payment may not be allocated correctly and you could face late payment interest.
Common mistakes to avoid
Incorrect accounting period
Your CT600 covers a specific accounting period, which may not be the same as your financial year. A company’s accounting period cannot be longer than 12 months. If your financial year is longer (for example, an 18-month first period), you need to file two CT600s.
Forgetting disallowable expenses
Not all expenses in your accounts are deductible for tax purposes. Common items that must be added back include:
- Client entertaining
- Depreciation (replaced by capital allowances)
- Some legal fees (e.g. related to capital items)
- General provisions for bad debts (only specific bad debts are allowable)
- Fines for breaking the law
Not claiming all capital allowances
Many companies claim less than they are entitled to. Make sure you have considered:
- Annual Investment Allowance (£1,000,000 per year for qualifying assets)
- Writing-down allowances on the main rate and special rate pools
- Full expensing for qualifying main rate plant and machinery
- Structures and buildings allowance (3% straight-line for commercial property)
Missing the payment deadline
Remember: the payment deadline is three months before the filing deadline. If you wait until the filing deadline to pay, you will already owe interest on three months of late payment.
Penalties for late filing
HMRC imposes automatic penalties for late CT600 filing:
| How late | Penalty |
|---|---|
| 1 day late | £100 |
| 3 months late | Another £100 |
| 6 months late | 10% of unpaid tax (HMRC estimate) |
| 12 months late | Additional 10% of unpaid tax |
If your return is late three times in a row, the £100 penalties increase to £500 each.
On top of the filing penalties, HMRC charges interest on any Corporation Tax paid late. The current rate is published on the HMRC website and changes periodically.
Making Tax Digital for Corporation Tax
HMRC is extending Making Tax Digital (MTD) to Corporation Tax. While the timeline has been pushed back several times, companies should prepare by:
- Using MTD-compatible software for their accounting records
- Keeping digital records of all transactions
- Being ready to submit quarterly updates when required
Using software that already supports MTD for VAT and is built for digital filing will make the transition smoother. Check whether your current software is ready, or compare accounting software before the deadline.
After you file
Once HMRC processes your return, they may:
- Accept it without further queries
- Open an enquiry (they have 12 months from the filing date to do this)
- Issue a discovery assessment if they believe the return is incorrect
Keep all your records for at least six years after the end of the accounting period. If HMRC opens an enquiry, you will need to provide supporting documentation for everything in your return.
For a broader look at what needs to happen around your year end, see the year-end accounting checklist.