Understanding Corporation Tax
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Understanding Corporation Tax
When running a business, understanding your tax obligations is essential to staying compliant. One of the main taxes for limited companies is Corporation Tax and understanding how to calculate it is essential in ensuring you meet tax requirements.
At BCS Accountants, this month’s blog offers a guide to understanding Corporation Tax. For more information, contact us on 01524 824111.
What is Corporation Tax?
Corporation Tax is a tax that all limited companies must pay on their profits. This is paid annually to HMRC, and is a self-assessed tax levied on company profits, as well as investments or selling capital assets.
There is no tax-free allowance for Corporation Tax. Even your first £1 profit is taxable.
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How to Calculate Corporation Tax for Small Businesses
Working out your Corporation Tax requires some skills in accounting. You will need to understand what tax reliefs your business can benefit from, which helps reduce the amount your business pays.
To calculate your Corporation Tax, you will need to:
- Work out your company’s accounting period
- Calculate total income
- Deduct allowable business expenses
- Apply capital allowances (if applicable)
- Apply the Corporation Tax rate
- File & pay
At BCS Accountants, we can support you in preparing your company tax returns. With accurate bookkeeping, we ensure your financial records are always up to date. We can help you plan ahead and keep your records clean.
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Tips for Managing Corporation Tax
Use Accounting Software
Accounting software helps automate calculations and ensure compliance with Making Tax Digital.
Work with an Accountant
As qualified advisers, BCS Accountants can help you identify any tax-saving opportunities and avoid errors.
Budget for Tax
Set aside a percentage of your monthly profits in a separate account instead of waiting until the bill arrives.
Review Your Tax Position Annually
If your profits are growing or you are investing in assets, check whether new reliefs apply.
Stay Informed
Corporation Tax rules change regularly. Make sure you are aware of updates in each Budget or fiscal statement.
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How Can we Help?
Corporation Tax is an important part of running a business. Understanding how it works puts you in control and allows better financial planning. At BCS Accountants, we can help you stay proactive.
By offering bookkeeping services, we ensure your company remains in line with various tax regulations. As qualified accountants, we advise you on the best steps to make greater savings.
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Contact BCS Accountants
For advice on Corporation Tax, contact our team at BCS Accountants. We are based in Bolton-Le-Sands, near Carnforth, but cover Morecambe, Lancaster and Kendal. Call us on 01524 824111. Alternatively, send us a message via our contact form and we’ll be in touch.
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Contact BCS Accountants
Address:
BCS Accountants & Tax Consultants
Border House, 60 Main Road
Bolton le Sands, Carnforth
Lancashire, LA5 8DN
Contact Details:
Tel: 01524 824111
Fax: 01524 825327
Email: enquiries@b-c-s.co.uk
