Company accounts, CT600 preparation, relief claims and owner-managed business tax
Corporation Tax Returns, Company Accounts and Director Tax
A Corporation Tax return must reconcile the company's statutory accounts with the tax adjustments, capital allowances, losses, reliefs, chargeable gains and supplementary disclosures required for the accounting period. We prepare accounts and CT600 returns for professional practices, technology businesses, property companies, construction firms, manufacturers, healthcare companies, hospitality operators and other owner-managed businesses across Exeter and surrounding Devon.
Direct answer
What a Corporation Tax Return Must Include
A Company Tax Return normally consists of the CT600 form, the company's statutory accounts, a detailed tax computation and any supplementary pages needed for matters such as chargeable gains, loans to participators, group relief, controlled foreign companies or restitution interest.
The accounting profit is not the taxable profit. The computation adjusts for disallowable expenditure, capital allowances, losses, reliefs, non-trading income, loan relationships, property profits, chargeable gains and the Corporation Tax rate applying to the period.
Financial reporting and tax reporting use different rules
Statutory accounts follow accounting standards; the Corporation Tax computation then applies the tax legislation to those figures.
Profit level alone does not decide the Corporation Tax rate
Associated companies, short periods, exempt distributions and close-investment-company status can alter the small-profits and Marginal Relief calculation.
Director and shareholder entries must agree across the records
Payroll, dividends, expenses, benefits, pension payments and director loans must reconcile with the accounts and the relevant personal tax reporting.
Different companies create different computations
Corporation Tax Return Work for Different Business Models
The tax computation should reflect how the company earns income, finances activity, remunerates owners, acquires assets and interacts with connected companies. The categories below mirror the company profiles found across Exeter and the wider Devon business market.
Corporation Tax Return for a Trading Limited Company
Sales, payroll, director transactions, business expenses, capital expenditure, losses and dividends are reconciled from the ledgers through to the accounts and CT600.
Consultancy and Professional-Service Companies
Work in progress, subcontractors, travel, professional subscriptions, employment status, overseas clients and director remuneration can create tax adjustments beyond routine bookkeeping.
Software, Intellectual Property and R&D Relief
Development expenditure, intangible assets, subcontracted R&D, overseas costs, grants and the merged RDEC or ERIS conditions require a documented technical and financial analysis.
CIS, Subcontractors, Work in Progress and Plant
Contract income, retentions, CIS deductions, reverse-charge VAT, subcontractor costs, vehicles, plant and year-end work in progress must reconcile across the company filings.
Stock, Machinery, Energy and Capital Allowances
Stock valuation, production overheads, plant purchases, leasing, repairs, full expensing and disposal proceeds can materially change taxable profits.
Rental Companies, Finance Costs and Chargeable Gains
Rental profits, loan relationships, connected-party finance, improvement costs, capital allowances and property disposals require company-specific treatment rather than individual-landlord rules.
Development Stock, Land Transactions and Profit Recognition
The purpose of acquisition, planning, construction, finance, sales contracts and transfers to connected parties determine whether profits are trading income or chargeable gains.
Private Practice, Locum and Medical-Service Companies
Clinical income, associates, room costs, equipment, pensions, VAT status and payments to directors must be reviewed with the individual's NHS or other employment position.
Seasonal Businesses, Accommodation and Events
Deposits, booking commissions, stock, tips, payroll, capital refurbishment, VAT and fluctuating year-end accruals require reliable management records.
Associated Companies, Group Relief and Intercompany Balances
Common control can reduce Corporation Tax thresholds. Management charges, loans, dividends, asset transfers and loss relief must be supported by the commercial and legal position.
First Accounts, Long Periods and Dormant Companies
A Companies House period longer than 12 months can require two Corporation Tax accounting periods. Pre-trading costs, commencement dates and dormant status must be established separately.
Late CT600 Returns, Corrections and HMRC Checks
Missing returns, estimated liabilities, accounting errors, relief claims and HMRC questions are reviewed together before amended documents or explanations are submitted.
From accounting profit to taxable profit
How the Corporation Tax Computation Is Built
The computation explains every material difference between the profit in the accounts and the profits chargeable to Corporation Tax.
Trading income and expenses
Turnover, stock, accruals, provisions, payroll, subcontractors and wholly-and-exclusively expenditure.
Loan relationships
Bank interest, shareholder loans, connected-party finance, foreign exchange and non-trading deficits.
UK and overseas property profits
Rental income, repairs, finance, lease incentives, losses and company-specific property rules.
Chargeable gains
Asset disposals, base cost, indexation to December 2017, losses, group transfers and exemptions.
Disallowable expenditure
Client entertaining, fines, depreciation, private expenditure, capital items and unsupported provisions.
Capital allowances
AIA, full expensing, first-year allowances, writing-down pools, cars and disposal adjustments.
Current, carried-back and carried-forward relief
Trading losses, property losses, loan deficits, management expenses and group relief claims.
R&D and other company reliefs
Merged RDEC, ERIS, creative reliefs, charitable donations and other qualifying claims.
Director loans and additional CT600 pages
Section 455, group relief, controlled foreign companies and other company-specific disclosures.
Current financial year 2026 position
Corporation Tax Rates, Marginal Relief and Filing Requirements
The main Corporation Tax rate remains 25% and the small-profits rate remains 19%. Marginal Relief can apply between £50,000 and £250,000 of augmented profits, subject to associated-company, short-period and company- status rules.
19% at profits of £50,000 or less
The limit is reduced for short periods and divided by the total number of associated companies.
Gradual increase between £50,000 and £250,000
The calculation uses augmented profits and is not available to every company, including certain investment companies.
25% above £250,000
The adjusted upper limit can be reached much earlier where several companies are under common control.
Commercial software is required for CT600 filing
HMRC's former online filing service closed on 31 March 2026; the return, computation and accounts are filed digitally.
Company owners and close companies
Salary, Dividends, Benefits and Director Loan Accounts
The company and director positions should be reviewed together. A payment can affect Corporation Tax, PAYE, National Insurance, benefit reporting, distributable reserves and the director's Self Assessment return in different ways.
Employment costs can reduce company profit
Salary and employer costs are normally deductible where incurred for the trade, but payroll timing, accrued remuneration and National Insurance must be recorded correctly.
Distributions do not reduce Corporation Tax
Dividends require sufficient distributable reserves, board approval and vouchers. They are reported personally and cannot be treated as a deductible business expense.
Private use can create PAYE or benefit reporting
Cars, medical insurance, travel, homeworking, phones, accommodation and reimbursed expenses require separate Corporation Tax and employment-tax analysis.
Section 455 is 35.75% for relevant loans from 6 April 2026
The charge can arise where a participator's loan remains outstanding after the statutory period. Repayment relief, replacement loans and personal benefit rules must also be considered.
Investment, innovation and loss relief
Capital Allowances, R&D Relief and Company Losses
Relief should be considered before the return is finalised. Asset purchase dates, legal ownership, business use, contracting arrangements and the company's wider group position can change both the timing and value of a claim.
AIA, Full Expensing and First-Year Allowances
Companies may use the £1 million AIA, 100% full expensing, the 50% special-rate allowance or the 40% first-year allowance where the asset and transaction qualify.
Main-rate writing-down allowance is 14% from April 2026
Pool balances, special-rate assets, cars, leasing exclusions and disposal values are reviewed where first-year relief is unavailable or not fully claimed.
Merged RDEC and ERIS Apply to Current Periods
The qualifying project, competent professional, staffing, subcontracting, overseas restrictions, intensity condition and additional information form must support the claim.
The Best Claim Depends on Timing and Future Profits
Current-period set-off, carry-back, carry-forward and group relief can produce different cash-flow and commercial outcomes. Ownership changes can restrict historic losses.
Connected and international company matters
Associated Companies, Groups and Overseas Transactions
A company does not operate in isolation where the same people control other companies, trade through overseas entities or move funds and services within a group. The commercial facts and legal agreements should support the accounting and tax entries.
Common Control Can Reduce the Rate Thresholds
The relationship is tested across the accounting period. Dormant passive companies can sometimes be excluded, while commercial interdependence can make companies associated despite separate shareholders.
Loans and Charges Must Reflect the Actual Transactions
Management charges, loan interest, dividends, asset transfers and cash movements need agreements, invoices, board records and matching entries in both companies.
Group Relief Is a Claim, Not an Automatic Consolidation
Ownership percentages, corresponding periods, loss type, surrender consent and restrictions must be satisfied before profits in one company are relieved by another company's losses.
Foreign Income, Withholding Tax and Transfer Pricing
Overseas permanent establishments, foreign companies, royalties, services, financing and withholding tax require source, treaty, credit-relief and transfer-pricing review.
Late filing, errors and HMRC review
Corporation Tax Corrections and Company Filing Penalties
Companies House accounts, Corporation Tax payment and CT600 filing have separate deadlines and separate penalty regimes. Correcting only one document may leave the accounts, tax computation and return inconsistent.
Automatic penalties increase with the period of delay
A private company's penalty starts at £150 for accounts up to one month late and can reach £1,500 after more than six months. Penalties double where accounts are late in consecutive years.
HMRC penalties begin from the first day late
Current penalties start at £200, with another £200 after three months. Tax-based penalties can arise at six and 12 months, and repeated late filing increases the fixed penalties.
Paying the tax does not remove the return obligation
Interest runs on late Corporation Tax. A company should use the correct accounting-period reference and address any estimate or determination after the final computation is prepared.
Accounts, computation and CT600 should be corrected together
A return can normally be amended within 12 months of the filing deadline. Older matters may require a claim, disclosure or response during an HMRC enquiry.
Agreed Exeter guide fees
Corporation Tax Return and Company Accounts Fees
These are the previously agreed fees. Statutory accounts and the Company Tax Return are separate deliverables, although both use the same accounting records. The engagement confirms exactly which filings and advisory work are included.
Micro-entity statutory accounts
Annual statutory accounts from complete and reconciled bookkeeping for a qualifying micro-entity.
Small-company statutory accounts
Annual statutory accounts for a small company with the required disclosures and supporting schedules.
Simple Corporation Tax return and CT600 computation
A defined trading company with complete accounts, limited tax adjustments and no complex relief or group issues.
Complex Corporation Tax return and CT600 computation
Company tax work involving material adjustments, reliefs, gains, losses, associated companies or supplementary pages.
Confirmation statement preparation and filing
Review and filing of the annual confirmation statement where the company information is complete.
R&D, group relief, restructuring or HMRC enquiry work
Technical advisory, claim and dispute work is scoped after the facts, records and correspondence are reviewed.
Records required after engagement
Information Needed for Reliable Accounts and a CT600 Return
The first enquiry does not require documents. Once the scope is agreed, the checklist is tailored to the company's activities, accounting system and tax issues.
Accounting records
- Trial balance and nominal ledger
- Sales and purchase ledgers
- Bank and card reconciliations
- Year-end journals and control accounts
Income and contracts
- Sales invoices and revenue schedules
- Contracts, retentions and deferred income
- Work in progress and stock records
- Overseas income and withholding tax
Expenses and payroll
- Supplier invoices and expense claims
- Payroll, pension and benefit records
- Travel, entertaining and private-use details
- Accruals, provisions and prepayments
Directors and shareholders
- Director loan account transactions
- Dividend minutes and vouchers
- Share issues and ownership changes
- Related-party and connected-company balances
Assets and reliefs
- Fixed-asset register and purchase invoices
- Disposal documents and valuations
- Capital allowance pools
- R&D, grant and loss-relief records
Earlier filings and HMRC
- Prior accounts and CT600 returns
- Loss and capital-allowance schedules
- Companies House filing information
- HMRC letters, penalties or enquiry notices
Preparation and filing process
From Company Records to Accounts and CT600 Submission
The process reconciles the financial records first, then prepares the accounts, tax computation and Company Tax Return before the director approves the filings.
Company filings and deadlines identified
We confirm the accounts, CT600, confirmation statement, VAT, payroll and advisory work required.
Ledgers and balances reconciled
Bank, debtors, creditors, payroll, VAT, fixed assets and director balances are reviewed for the year end.
Statutory accounts and computation prepared
Accounting adjustments, tax disallowances, allowances, losses, reliefs and Corporation Tax are calculated.
The director reviews before filing
The accounts, CT600, tax liability and payment deadline are explained before submission to Companies House and HMRC.
Exeter and surrounding Devon
Corporation Tax Work Reflecting the Regional Business Base
The wider Exeter market combines professional, healthcare, university and technology activity with property, construction, manufacturing, tourism, rural enterprises and family-owned companies. The tax computation should reflect the commercial model rather than use generic company assumptions.
Professional, healthcare, university and technology companies
Consultancy income, several directors, international services, R&D, employee incentives, property and founder transactions.
Tourism, property, trades and private companies
Accommodation, hospitality, seasonal income, construction, property investment, family ownership and succession.
Manufacturing, construction and rural businesses
Stock, plant, capital allowances, CIS, land, diversification, family companies and associated-business structures.
Hospitality, property and owner-managed enterprises
Coastal tourism, food and events, property companies, manufacturing, trades and retirement or succession planning.
Common technical questions
Corporation Tax Return FAQs
Which companies must file a Corporation Tax Return?
A company or association must normally file a Company Tax Return when HMRC issues a notice to deliver one. The return is still required where the company made a loss, had no Corporation Tax to pay or intends to claim relief. A genuinely dormant company may not need a return unless HMRC requests one, but Companies House filing obligations can continue.
What are the Corporation Tax rates for financial year 2026?
For non-ring-fence profits, the main Corporation Tax rate is 25% and the small-profits rate is 19%. Marginal Relief can apply where augmented profits fall between £50,000 and £250,000. Those limits are reduced for short accounting periods and divided by the number of associated companies.
How do associated companies affect the Corporation Tax rate?
The £50,000 and £250,000 limits are divided by the total number of associated companies, including the company itself. Two companies under common control will normally reduce the limits to £25,000 and £125,000 for each company. Commercial interdependence and control must be reviewed rather than relying only on direct share ownership.
What are the accounts, Corporation Tax payment and CT600 deadlines?
A private company normally files annual accounts at Companies House within nine months of its financial year end. Corporation Tax is usually paid nine months and one day after the accounting period ends, while the Company Tax Return is due 12 months after the accounting period. First accounts and companies paying by instalments can follow different rules.
What is the difference between statutory accounts and a CT600 return?
Statutory accounts report the company's financial position and performance under the applicable accounting standards. The CT600 and tax computation adjust the accounting profit for tax rules, capital allowances, losses, reliefs, chargeable gains and other Corporation Tax items. The documents are connected but they are not interchangeable.
Which company expenses are deductible for Corporation Tax?
A revenue expense is generally deductible where it is incurred wholly and exclusively for the company's trade and is not specifically disallowed. Capital expenditure, client entertaining, fines, private expenditure, dividends and some provisions are not ordinary trading deductions. Capital expenditure may instead qualify for capital allowances.
Are dividends deductible when calculating Corporation Tax?
No. Dividends are distributions of post-tax profit and do not reduce taxable company profits. They must be supported by sufficient distributable reserves and proper company records. Salary, employer pension contributions and benefits follow different Corporation Tax, PAYE and National Insurance rules.
How is an overdrawn director's loan account taxed?
A close company can face a section 455 charge where a loan to a participator remains outstanding more than nine months after the accounting period in which it arose. For loans made on or after 6 April 2026, the section 455 rate is 35.75%. A beneficial-loan charge can also arise personally where the relevant conditions are met.
How can a company use trading losses?
Trading losses may be available against other profits of the same accounting period, carried back to an earlier period, carried forward against later profits or surrendered as group relief where the statutory conditions apply. The available route depends on the type and age of the loss, continuity of the trade and any ownership change.
What capital allowances can a company claim in 2026?
A company may be able to claim the £1 million Annual Investment Allowance, 100% full expensing for qualifying new main-rate plant and machinery, the 50% first-year allowance for qualifying special-rate assets or the 40% first-year allowance introduced for qualifying expenditure from 1 January 2026. Cars, leased assets, buildings and disposals require separate treatment.
Which R&D relief applies to current accounting periods?
For accounting periods beginning on or after 1 April 2024, the relevant regimes are the merged R&D expenditure credit scheme and Enhanced R&D Intensive Support for qualifying loss-making R&D-intensive SMEs. The claimant, contracting arrangements, overseas expenditure, qualifying activities, PAYE cap and additional information form must all be reviewed.
Can an incorrect Company Tax Return be amended?
A company can normally amend its return within 12 months of the filing deadline. Older errors may require a separate claim, disclosure or response within an HMRC enquiry. The accounts, computation, CT600, supplementary pages and tax payment should be reconciled before the correction is submitted.
Discuss the company before records are sent
Start with the Activities, Year End and Filing Position
A short summary is enough for the initial review. We will confirm the accounts, CT600 or advisory work required, the records needed and the agreed fee before substantive preparation begins.