Corporation Tax Self Assessment (CTSA) was introduced for all companies with an accounting period ending after 1 July 1999. Under CTSA, the legal responsibility for correctly calculating the corporation tax liability falls squarely on the company. Tax returns must be completed and filed within 12 months of the end of the accounting period; however, payment needs to be made prior to this date.

Smaller companies must pay their tax liability within nine months of the end of the accounting period. Large companies must make payments on account in advance of this date. Large companies are those with profits over £1.5million, although this figure is reduced if the company is a member of a group. The Inland Revenue will charge interest on any underpayment. The Revenue will pay interest on overpayments but at a significantly lower rate! It is therefore important that you make accurate estimates of profit.

New rules introduced in the 2002 Finance Act mean that companies are now able to obtain tax relief for expenditure on Intangible Fixed Assets. The rules do not apply to individuals or assets purchased before 1 April 2002. Intangible assets include expenditure on goodwill, patent rights and similar assets. Unlike the capital allowances regime for plant and machinery where the rates of “tax depreciation” are strictly set down by tax law, companies will be able to use the same rates of depreciation for tax purposes as they use in their accounts. Inevitably this means that the accounting policy which companies have adopted will come under closer Inland Revenue scrutiny.

Top Line Management Ltd can help your company to comply with the requirements imposed by CTSA: we understand the issues which face entrepreneurial businesses and can prepare the tax return in a timely and efficient manner we can calculate the company’s tax liability which is due nine months after the year end we can also assist with the calculation of payments on account where they are necessary.