Tax Return Accountant: Do I Need an Accountant to File My Taxes in 2018?

The amount of tax that firm owners have to pay largely depends on their business structures. There are many types of business structures in the UK, each with its own tax implications. If your primary concern when starting an enterprise is the taxation expense, then a sole trader form of business is the best option. To put it simply; this means that you are the exclusive owner of the firm and thus have unlimited liability. What’s more, sole trader businesses are not subjected to taxation. All the owner has to do is present the basic accounts and complete the relevant ‘self-employment’ form on the UK tax return.

But if you own a limited company, then the HMRC requires you to complete a company tax return at the end of each financial year. This article provides a guide on how to go about filing your company tax return in 2018.

Why is it Best to Outsource Your Tax Accounting?

Domestic tax laws and regulations are changing more and more often, and it is increasingly hard to find professionals that are well versed in the current system and all of its intricacies. Because of these constant changes, it is becoming all but impossible to fill in the return yourself.

This is where outsourcing comes forth, as with platforms such as Ageras it is possible to select from a wide range of professional accountants that are experienced in submitting tax returns for companies of your specific size and operations. With such a wide range, it will be even possible to hire a tax accountant that is specialised in your exact field of business, and they would be the best possible tax accountant that you can employ. 

Outsourcing the task of tax accounting is not only significantly cheaper than having an ‘'in-house'' tax accountant but also ensures that they will be proficient and constantly active in the field. While hired accountant will focus on the task more as the season approaches, an outsourced professional is always in contact with clients and with the problems they face. Once you hire a professional that you need, they will already be ready and know all the possible issues your company might encounter, as well as all the ways where they will be able to save you as much money in taxes as possible.

How to Complete a Company Tax Return

Depending on the type of company you run, you may be required to complete a corporation tax return online with the HM Revenue and Customs. This company tax return form, which is referred to as CT600, has to be submitted alongside other documents, that is, accounts and tax computations. We have provided an in-depth review of what company reports are later in this article.

Before you can file your tax return online, you have to register your firm with the HMRC so that you can receive a user ID and password. If you’re a business owner, who is often forced to wear many hats, hiring a tax return accountant to handle this process might be a better option. 

Apart from submitting your company accounts to the HMRC, firm directors also need to send these accounts to the Companies House. Companies House is the main registrar of companies in the UK. You are free to file these accounts online or through the post. If you opt for the online route, you’ll need to get an authentication code from Companies House. This authentication code is an entirely different animal from the user ID given by the HMRC. 

What are Company Accounts?

These are documents that are usually presented at the end of a company’s financial year. The financial statements provide a summary of how the firm has performed in the previous accounting cycle. They also highlight the exact financial position of the business as at the year-end date. There four main company accounts that have to be prepared are:

  • Profit and Loss account, which highlights the net profits or losses of the company.
  • Balance sheet or the statement of financial position, which shows the number of assets and liabilities of the firm.
  • Notes- statutory notes provide a breakdown of the figures highlighted in the financial statements. 
  • Directors’ report- this document highlights the following: the core activity of the company, names of the directors, information regarding any political or charitable donations and policies on workers.

When is a Company Tax Return Due?

There are different deadlines for when to file the return and payment of tax. They are as follows:

  • One should file the company tax return with the HMRC within 12 months following the accounting period end to which it is associated.
  • If a company has any corporation tax due, the owners should pay the remaining amount electronically within nine months of the following accounting period. 

The best way to explain this is through an illustration. Suppose that company’s A accounting period ended on 31st December 2017. If this firm has any tax due, then it should pay this amount before 1st October 2018 and then file its returns by 31st December 2018. The easiest way to go about this process is to submit both documents together.

If a company files its returns past the required date, then it may be subjected to financial penalties. 

More specifically, late filing of company tax return attracts the following fines:

Less than three months late - a fine of £100

More than three months late – a fine of £200

More than one year late – 20% of the tax due

Can One Make Changes to the Company Tax Return?

In case you submit your company tax return and then realise that it contained errors much later, the HMRC allows you to make changes. But, you are only allowed to edit this form within twelve months from the date that the return submitted. You may also incur penalties for making errors in your company tax return. 

Why You Should File your Company Tax Early

Better Cash Flow Management

By filing your company tax return in time, you give yourself ample time to start saving for your next bills. If you pay your taxes late, not only will you be charged interest but you may also have to pay late payment penalties.

Avoid tax extension

If you file your tax return early, then you won’t have to ask for an extension. Often, extensions are as a result of disorganisation rather than a financial necessity. To avoid this, plan to file your tax return early in the year. 

Make amendments to your tax return

If you make an error when filing your company tax return, you will only have 12 months or less to correct it. Now if you choose to present this tax return at the eleventh hour, you won’t notice the errors you made until it’s too late. So the earlier you file your tax returns, the longer the window of opportunity to make corrections. 

Save on accountancy fees

Most accountants charge top dollar for their services if you deliver your financial statements in the latter part of the year. This price change is not unusual since this is the time that their accountancy services are in high demand. But if you want to get the best from your accountant and at a decent price, consider submitting your records early on in your financial year.

Wrap Up

Every company or association is required to file a company tax return with the HMRC. The only companies that are exempt from this are owners of sole trader businesses and partnerships. When presenting the company tax return, a firm owner has to submit the CT600 form and other financial records namely: balance sheet, profit and loss account, statutory notes and the directors’ report. The company tax return is filed at the end of each financial year. 

While it is technically possible to fill in all of the forms yourself, it is much more effective to outsource the job to an experienced professional. That professional has already assessed a multitude of companies for a tax return in the same fiscal year, and who will be able to give you the most out of your tax return, while simultaneously saving time and energy for your company.

Posted: 06 Sep, 2018 (Updated: 05 Nov, 2018)

The Ageras authors don't provide any personal advice with regard to financial or fiscal matters - but accountants do. Fill in the form and receive non-binding quotes for professional tax advice.

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