Let me congratulate you first on your new venture! I hope you have celebrated the formation of your UK company. Now it's about time you registered for corporation tax. The journey of running a business in the UK comes with responsibilities, including registering for corporation tax before it's too late – to dodge the penalties successfully. In this guide, we will explore how to register for corporation tax and who needs to register for corporation tax. So, without keeping you twiddling your thumbs, let's get right into it.
Understanding corporation tax
Before jumping into the registration process, let's first understand corporation tax. In the UK, corporation tax is levied on a company's profits, which include its trading profits, investment profits, and capital gains. As a business owner in the UK, any company or business needs to meet its obligations and contribute to the country's revenue.
Who needs to register for corporation tax?
It is essential to know if your business falls into the category of registering for corporation tax because only some businesses are required to register for corporation tax. Simply put, if your business is making a profit, it has become obligatory for you to register for corporation tax, and also if:
- You are operating as a limited company
- You are operating as a partnership with at least one individual who is not a UK resident
- You have started to trade as a sole trader, and your business has grown to become a limited company
- You have a non-profit organisation that makes a profit
A step-by-step guide on how to register for corporation tax
Here is a step-by-step guide on how to register for corporation tax online in the UK:
1. Obtain your unique taxpayer reference (UTR)
The first thing to go for is obtaining a UTR, a key identifier in all your tax-related activities, from HM Revenue & Customs (HMRC). You can get a UTR by registering your company with Companies House. Once you get it through your registered office address within 15 days, you can find it in your tax account in the HMRC app under "your details" or "self-assessment" tab.
2. Activate your corporation tax online account
After obtaining your UTR, the next step is activating your corporation tax online account through the HMRC website. The corporation tax online account will be your go-to for managing your tax affairs, making payments, and submitting results.
3. Provide company details
The next step is to gather the required details of your company, like:
- Your company registration number (CRN)
- Your Unique Taxpayer Reference (UTR)
- Your business's registered address
- Your business's contact details
- Your business's start date
- The date your annual accounts are made up to.
Submit these comprehensive details, including your company's legal structure, business activities, and financial year-end date. This information helps HMRC accurately assess your tax liability.
4. Determine your accounting period
An accounting period is the timeframe for calculating your company's profits and losses. Once you have decided on your company's accounting period, remember to keep accurate records of your financial transactions. This is a legal requirement and essential for correct tax calculations.
5. Register for corporation tax online
You can register for corporation tax online on the HMRC website by completing an online form.
Here is how:
- Go to the HMRC website and log into the account that you have created.
- Choose "Services you can use" and select "Corporation Tax".
- Click on "Register for Corporation Tax."
- Fill out the form with the required details, as mentioned in step 3, while following the instructions on the screen.
- Submit the form, and the job's a good'un!
Once you submit your registration form, HMRC will send you a letter confirming your corporation tax details, including your corporation tax reference number and the date you need to submit your first tax return.
Additional resources for corporation tax
Here are some additional resources for corporation tax to ensure you are well-informed:
- HMRC Official Website – The official source for all tax-related information.
- Companies House – Register your company and obtain your UTR.
- Affotax – Expert advice on tax matters for businesses.
We hope you now know how to register for corporation tax online in the UK. If you are good to go, check out our Corporation Tax Registration service and let us help you stay compliant.
