It is the duty of the registrar to inform HMRC when a new business is incorporated, so you don’t need to contact them separately. Soon after the formation of your business, HMRC will send a letter to the registered office of your company with form CT41G and your UTR.
A UTR is essential as you must provide it when contacting HMRC. Form CT41G mentions everything that you must know with regard to your business becoming ‘active’ for statutory information and corporation tax that must be provided to HMRC.
If you don’t plan on trading instantly, you must contact your nearest corporation tax facility and inform HMRC about the dormant state of your company. The requirements for dormant companies will be discussed thoroughly in the final part of this post.
Registering for corporation tax
Active companies are subject to corporation tax on their entire taxable income. Companies are considered active if the following conditions are fulfilled:
- The company continues any professional business or trading operation.
- Services and goods are sold and purchased so as to make a surplus or profit.
- A company is able to generate income.
- Interest can be earned.
- The company is able to manage investments.
- The business has employed staff.
You need to register at HMRC for the purpose of corporation tax, either online or through the post, within 90 days of beginning any business operation. If you register online, your business will be registered automatically for corporation tax. During the registration procedure, you will need to provide your UTR and CRN.
Getting the UTR of your company
You must have already set up the Gateway account by this time. This is essential for signing up your business for every type of tax, registering for any other online HMRC services and paying your business tax using the internet.
After setting up the gateway account, just follow the guidelines and offer HMRC the statutory details below:
- The date when you began your operations
- Registration number and business name
- Your business operation address (not the registered office except where this is the place where you carry out your primary business activities).
- The type of business operations being carried out.
- The date when you want to prepare the statutory records. This should be the default ARD offered by the registrar.
HMRC will utilise these details to work out the corporation tax accounting period of your company. Within 7 days of your incorporation being authenticated by HMRC, a special PIN or Activation Code will be sent to your registered office. It is important to activate the online services as soon as you receive this code as it will be active for a very short amount of time.
Companies that are actively trading need to pay their corporation tax nine months and 24 hrs after each accounting period ends. Usually, the accounting period will last for 12 months and is likely to match the financial period. You must file Company Tax Returns on the internet 12 months after your accounting period has ended.
Inform HMRC if your company is not trading (dormant)
A company that is already inactive (non-operational) won’t be accountable for corporation tax. Therefore, there is no need to file your tax return or register at HMRC for corporation tax during the entire period that your company stays dormant. Rather, you need to get in touch with the local tax office and let HMRC know that your business is dormant in writing. In the event it was formerly active, HMRC may ask you to pay corporation tax and submit the business tax return for the duration of business operations.
If your company never traded in the first place, you must add your incorporation date as its date of dormancy. Within a couple of weeks, you are likely to receive a notification that confirms the dormant state of your company from the tax office. You do not need to contact HMRC until you start trading once again.