UK accounting and tax FAQs

Micro-entity accounts are the simplified annual accounts the smallest UK companies can prepare under FRS 105: a short balance sheet with a few notes, plus a simple profit and loss account for HMRC. For financial years starting on or after 6 April 2025, a company can use them if it meets at least two of three limits: turnover of £1 million or less, a balance sheet total of £500,000 or less, and 10 or fewer employees.

A micro-entity can claim exemption from audit, so its accounts are normally unaudited. The balance sheet must state, above the director’s signature, that the accounts were prepared under the micro-entity provisions.

The same accounts go to three places:

• Shareholders, who must receive a copy each year.
• Companies House, within 9 months of the year end. At present a micro-entity only has to file the balance sheet and notes, so the profit and loss account stays off the public register.
• HMRC, in iXBRL format with the CT600, including the profit and loss account.

The Companies House position changes from 1 April 2028. Micro-entities will then have to deliver a profit and loss account (with an option to keep it off the public register) and file through commercial software.

A one-director design company with turnover of £180,000, total assets of £45,000 and no staff sits well inside all three limits, so its directors can prepare FRS 105 accounts and file only the balance sheet at Companies House.

SmartFiling’s guide to how micro-entity accounts are prepared and filed walks through each step, and its micro-entity accounts filing service prepares the accounts and CT600 together.

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A company is a micro-entity if, for financial years starting on or after 6 April 2025, it meets at least two of these three limits: turnover of £1 million or less, a balance sheet total of £500,000 or less, and 10 or fewer employees on average. After its first year, the test looks at two consecutive years, so one year over the limits does not end micro-entity status straight away.

A new company qualifies in its first financial year if it meets the conditions in that year. In later years it must meet them in that year and the year before.

The balance sheet test catches people out. “Balance sheet total” means the total of fixed and current assets before any liabilities are deducted, not net assets. A company holding a £400,000 property with a £350,000 mortgage has a balance sheet total of £400,000.

For financial years that started before 6 April 2025, the limits were lower: turnover of £632,000 and a balance sheet total of £316,000, with the same 10-employee limit.

Some companies cannot use the micro-entity regime whatever their size, including:

• public companies and charitable companies
• certain financial businesses, such as investment undertakings
• parent companies that prepare group accounts, and subsidiaries included in consolidated group accounts

A trading company with turnover of £1.3 million, total assets of £220,000 and six employees fails the turnover test but meets the other two, so it meets the size test for that year.

SmartFiling’s guide sets out the full micro-entity qualifying test with worked examples. Companies above the limits usually fall into the small company accounts regime instead, and SmartFiling confirms eligibility before starting micro-entity accounts filing.

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Micro-entity accounts follow FRS 105 and need only a short balance sheet, a few notes and a basic profit and loss account, while small company accounts follow FRS 102 Section 1A and need more notes, including accounting policies. Every micro-entity is also a small company, but a small company can only use micro-entity accounts if it meets the lower micro-entity size limits.

The micro-entity regime is optional. A company that qualifies can still prepare FRS 102 Section 1A accounts, which some directors do when a lender or investor wants more detail.

Both routes currently let a company keep its profit and loss account off the public register. From 1 April 2028, micro and small companies must deliver a profit and loss account to Companies House (with an option not to publish it), and small companies can no longer file abridged accounts.

A company with turnover of £2 million, total assets of £600,000 and 12 staff is too large for the micro-entity regime on all three tests but well within the small company limits, so it prepares FRS 102 Section 1A accounts.

SmartFiling’s guide sets out micro-entity vs small company accounts compared line by line.

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Micro-entity accounts include a balance sheet, a simple profit and loss account and a small number of notes, such as advances and credit granted to directors and financial commitments, guarantees and contingencies. The balance sheet also carries the directors’ statements confirming the accounts use the micro-entity provisions and that the company is exempt from audit, signed by a director.

The balance sheet. It follows a format set by regulations and shows a handful of totals: fixed assets, current assets, creditors due within and after one year, and capital and reserves. A director signs it for the board, with their name printed.

The profit and loss account. A short statement in a set format showing turnover, the main cost headings, tax and the profit or loss for the year. Shareholders and HMRC receive it; Companies House does not need it at present.

The notes. Only a few, placed at the foot of the balance sheet, which is the main reason these accounts are so short.

The statements above the signature. The micro-entity statement, plus, for a company claiming audit exemption, the standard statements under sections 477 and 476 of the Companies Act 2006.

A consultancy’s balance sheet might show fixed assets of £3,000, current assets of £41,000 and creditors due within one year of £12,000, leaving net assets and capital and reserves of £32,000. With the notes and statements, the whole set often fits on two or three pages.

Companies House rejects accounts that leave out the micro-entity statement or the director’s printed name. SmartFiling’s plain-English guide lists the notes FRS 105 requires, and its micro-entity accounts filing service prepares the full set with the CT600.

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A private limited company must file its annual accounts at Companies House within 9 months of its accounting reference date, which is the last day of its financial year. A company with a 31 March 2026 year end therefore has until 31 December 2026. A new company’s first accounts, and accounts for a shortened period, follow different rules.

Companies House counts the 9 months to the exact day:

• The deadline normally falls on the corresponding date. An accounting reference date of 4 April gives a deadline of 4 January.
• If the year end is the last day of a month, the deadline is the last day of the ninth month after it, so 30 April becomes 31 January.
• A deadline on a Sunday or bank holiday does not move.
• What counts is the date Companies House receives acceptable accounts. Accounts rejected after the deadline lead to a late filing penalty, even if the first attempt was on time.

Two situations change the date:

• First accounts covering more than 12 months are due 21 months after incorporation, or 3 months after the accounting reference date if that is later.
• A shortened period is due by the later of 9 months after the new accounting reference date or 3 months after Companies House receives form AA01.

HMRC deadlines run separately. For the same 31 March 2026 year end, Corporation Tax is normally payable by 1 January 2027 and the CT600 is due by 31 March 2027.

You can check any company’s deadline on the Companies House register, and SmartFiling’s guide lists every Companies House filing deadline by year end. If a deadline is close, SmartFiling’s micro-entity accounts filing service files within 7 working days of receiving complete records.

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A new company’s first accounts, if they cover more than 12 months, are due at Companies House 21 months after the date of incorporation, or 3 months after the accounting reference date if that gives a later deadline. If the first accounts cover 12 months or less, the normal rule applies and they are due 9 months after the accounting reference date.

Most first accounts do run for more than 12 months, because Companies House sets a new company’s first accounting reference date as the last day of the month in which the first anniversary of incorporation falls. Unless the directors change it, the first period therefore runs for more than 12 months.

A company incorporated on 15 March 2026 has a first accounting reference date of 31 March 2027, so its first accounts cover 15 March 2026 to 31 March 2027. The two possible deadlines are:

• 15 December 2027 (21 months after incorporation)
• 30 June 2027 (3 months after the accounting reference date)

The later date wins, so the first accounts are due by 15 December 2027.

If the directors shorten the first period by filing form AA01, the deadline becomes the later of 9 months after the new year end or 3 months after Companies House receives the form.

Corporation Tax works differently. A Corporation Tax accounting period can never be longer than 12 months. Assuming it started trading straight away, the same company has two accounting periods (15 March 2026 to 14 March 2027, and 15 March 2027 to 31 March 2027) and files two CT600s.

SmartFiling’s deadlines guide has first accounts deadlines, worked through for other incorporation dates, and a separate guide covers your first Corporation Tax return.

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Yes. Directors can prepare and file their own company accounts, and the law does not require a company to use an accountant. Since HMRC’s free filing service (CATO) closed on 31 March 2026, though, you need commercial software to file the CT600 with accounts and computations in iXBRL. Companies House still accepts micro-entity accounts through WebFiling until 31 March 2028.

Filing yourself means four separate jobs:

1. Prepare the accounts in the right format, such as FRS 105 for a micro-entity, with the required statements above the director’s signature.
2. File the accounts at Companies House within 9 months of the year end, using the company’s authentication code.
3. Work out taxable profit in a Corporation Tax computation, then file the CT600 with the iXBRL accounts and computation through commercial software within 12 months of the period end.
4. Pay any Corporation Tax 9 months and 1 day after the period ends.

The DIY route tends to suit a company with simple records, such as a single-director consultancy with one bank account, no stock and no employees. It gets harder with capital allowances, director’s loan balances, stock or VAT adjustments.

Companies House rejects accounts that miss a required statement or the signing director’s printed name, and accounts rejected after the deadline attract a late filing penalty. Directors remain legally responsible for the accounts whoever prepares them.

From 1 April 2028 WebFiling and paper stop accepting accounts, so every company will need software or an agent for Companies House too.

SmartFiling’s guide weighs up DIY vs using a filing service, including what software needs to handle. If you would rather hand it over, the micro-entity accounts filing service covers the accounts, CT600 and both submissions for one fixed fee.

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For year-end accounts your accountant normally needs the company’s bank statements for the whole year, sales and purchase records, details of assets bought or sold, loans, dividends paid and any money directors took out of or paid into the company. Last year’s filed accounts and CT600, and the codes needed to file, complete the pack.

A practical checklist:

• Bank and card statements for every business account, for the full year
• Sales and purchase invoices or receipts, or access to your bookkeeping software
• Dates and prices of assets bought or sold, such as equipment or vehicles
• Loan agreements and the balance owed at the year end
• Dividend vouchers and the board minutes declaring each dividend
• Your director’s loan account: money you took that was not salary or dividends, and money you lent the company
• Payroll reports if the company ran PAYE, and VAT returns if registered
• Year-end figures for stock, unpaid customer invoices and unpaid supplier bills
• The company’s 10-digit Unique Taxpayer Reference (UTR), Companies House authentication code and HMRC agent authorisation

The year-end balances matter as much as the transactions. The balance sheet shows what the company owned and owed on the last day of its financial year, so your accountant needs the amounts outstanding on that date. A director’s loan still overdrawn 9 months and 1 day after the year end can trigger an extra tax charge on the company under section 455.

Keep the originals: HMRC requires company records to be kept for 6 years from the end of the last financial year they relate to. SmartFiling’s guide covers the business records to keep, and the service page lists what SmartFiling needs for your micro-entity accounts.

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From 1 April 2028 every company must file its accounts at Companies House using commercial software in iXBRL format, micro and small companies must deliver a profit and loss account (with an option to keep it off the public register), and abridged accounts end. The government confirmed this timetable on 9 June 2026, a year later than the April 2027 date first planned.

The main changes, made under the Economic Crime and Corporate Transparency Act 2023:

• Software-only filing. WebFiling and paper will stop accepting accounts, with no transition period. The rule covers every company, including dormant companies and revised accounts. WebFiling stays open for other filings, such as confirmation statements and director changes.
• Profit and loss account for micro and small companies. Both must deliver one to Companies House. They can opt out of publishing it, but Companies House has not yet said how the opt-out will work. Companies House, HMRC and law enforcement will still see it.
• No more abridged accounts. Small companies will file full accounts under the small companies regime. Filleted accounts, where the profit and loss account is left off the filed copy, effectively end too.
• A stronger audit exemption statement. Directors claiming exemption from audit must state which exemption applies and confirm the company qualifies.
• All parts filed together. The accounts and reports must be delivered as one filing.
• Limits on shortening the year end. Shortening an accounting reference period more than once in five years will need a business reason.

One announced change has no start date yet. In October 2025 the government said it would remove the requirement for companies to prepare a directors’ report, and further details are still awaited.

Take a micro-entity with a 31 March year end. Its accounts for the year to 31 March 2027 are due by 31 December 2027, so WebFiling is still available for them. Its accounts for the year to 31 March 2028 are due by 31 December 2028 and must go through software.

Companies that already file the CT600 through commercial software are part-way there, because HMRC already requires iXBRL accounts. The practical step now is to check that your software, or your accountant’s, can also file iXBRL accounts at Companies House, as not every package does.

SmartFiling’s comparison guide explains what changes for small company accounts in April 2028. The glossary covers abridged accounts and WebFiling, and SmartFiling’s micro-entity accounts filing already includes iXBRL tagging.

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iXBRL (Inline eXtensible Business Reporting Language) is the tagged digital format HMRC requires for the accounts and tax computation filed with every CT600. You need it whenever your company files a Company Tax Return, although your software or accountant normally creates it for you. From 1 April 2028, Companies House will require iXBRL for all company accounts too.

An iXBRL document looks like an ordinary set of accounts to a person reading it on screen. Behind the text, each figure carries a machine-readable tag, such as turnover or net assets, so HMRC and Companies House systems can read the numbers directly.

Who needs it now:

• Any company filing a CT600. The return must be filed online, with the accounts and computation in iXBRL. A paper return is only allowed with a reasonable excuse or when filing in Welsh.
• Companies filing accounts at Companies House through software. Companies House receives software-filed accounts in iXBRL.

Until 31 March 2026, companies could file the CT600 and accounts through HMRC’s free CATO service. Since it closed, a company filing its own return needs commercial software that produces iXBRL accounts and computations. Not every package supports the tagging Companies House needs, so check that before paying.

A director who filed through CATO for the year to 31 December 2024 now needs software, or an accountant, for the year to 31 December 2025. That CT600 is due by 31 December 2026.

SmartFiling’s guide explains what filing your own CT600 involves. SmartFiling’s CT600 filing service includes iXBRL tagging of the return, computation and accounts.

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If your accounts reach Companies House late, the company receives an automatic penalty of between £150 and £1,500 depending on how late they are, and the penalty doubles if the previous year’s accounts were also late. Failing to file is also a criminal offence for directors, and a company that stops filing can be struck off the register.

Companies House sends the penalty notice to the registered office automatically. The late filing penalty is charged to the company, and unpaid penalties go to debt collectors. Companies House will normally accept payment by monthly instalments over a short period if you ask.

The penalty is not the only consequence. Directors can be prosecuted and fined personally for not delivering accounts, separately from the company’s penalty. If Companies House decides the company is no longer operating, it can start compulsory strike-off, and the assets of a dissolved company, including its bank balance, can pass to the Crown.

A company with a 31 March 2026 year end must file by 31 December 2026. If its accounts arrive on 15 February 2027, they are more than one month late, so the penalty is £375, or £750 if the previous year’s accounts were late too.

A late CT600 brings separate HMRC penalties, starting at £200.

Appeals only succeed in exceptional circumstances, and SmartFiling’s guide to Companies House late filing penalties explains when they work. If accounts are already overdue, SmartFiling can get overdue accounts filed within 7 working days of receiving complete records, which may be in time to keep the penalty out of the next band.

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You appeal a Companies House late filing penalty through Companies House’s online appeal service, or in writing, giving a specific reason why the accounts could not be filed on time and evidence to support it. Appeals only succeed in exceptional circumstances outside the company’s control, such as serious illness or a death close to the filing deadline, or an error by Companies House.

You will need the company number, the penalty reference, a specific reason with dates, and supporting documents (such as a doctor’s letter or insurance claim) naming the person or company affected.

Companies House says an appeal is unlikely to succeed if it rests only on reasons like these:

• the company is dormant or cannot afford to pay
• you relied on your accountant, or your accountant was ill
• these were the company’s first accounts, or you did not know the filing rules
• the accounts were delayed or lost in the post
• another director was responsible for filing

Companies House suspends recovery action while it considers the appeal. You can only appeal once against each penalty notice.

If the appeal is rejected, you can write to the Senior Casework Unit in the Late Filing Penalties Department with further information. If that unit upholds the penalty, the independent adjudicators can review the case, although they cannot force the registrar to cancel it.

A sole director admitted to hospital a week before a 31 December deadline, with hospital letters confirming the dates, has a realistic case. A director who forgot the deadline does not.

SmartFiling’s guide explains how to appeal a late filing penalty in more detail, and the glossary defines the Companies House late filing penalty.

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Yes, you can apply to Companies House for more time to file your accounts, but only before your filing deadline and only because of an event outside your control, such as unexpected illness or a fire destroying company records shortly before the deadline. Being busy or forgetting does not qualify, and Companies House grants extensions only when the reasons are exceptional.

To apply, use Companies House’s online service to extend your accounts filing deadline. You need the company number, an explanation of why you need more time and, ideally, supporting documents such as a medical letter.

Companies House emails its decision. File by the original deadline if you can rather than waiting for an answer. If the extension is granted, the accounts must reach Companies House before the new date or the company still gets a late filing penalty. An extension does not change the deadlines for future years.

There are limits. Companies House says the law allows a maximum filing period of 12 months, so a company that has already had an extension may not be eligible for more time. Changing the accounting reference date with form AA01 cancels any extension granted for that period.

An extension from Companies House only covers the accounts. The CT600 filing deadline and the Corporation Tax payment date at HMRC stay the same.

A company with a 31 March 2026 year end has a Companies House deadline of 31 December 2026. If its only director is taken seriously ill in early December, the application must go in before 31 December 2026.

SmartFiling’s deadlines guide covers applying to Companies House for more time. For a backlog rather than an emergency, micro-entity accounts filing within 7 working days of complete records is often quicker.

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You change your company’s year end by filing form AA01 with Companies House (online, through software or on paper) before the filing deadline for the period you want to change. At present you can shorten a financial year as often as you like, but you can only extend one once every five years, and never beyond 18 months.

The rules on changing the accounting reference date:

• You can change the current financial year or the one immediately before it, but not once its accounts are overdue.
• Shortening: by as little as one day. From 1 April 2028, shortening more than once in five years will need a business reason.
• Extending: up to 18 months from the start of the period, and only once every five years unless the company is in administration, is aligning with a UK parent or subsidiary, or has Secretary of State approval.

After shortening, accounts are due by the later of 9 months after the new year end or 3 months after Companies House receives the AA01. Any extension of time for that period is cancelled, and if the new deadline has already passed, a late filing penalty follows.

A company with a 31 March year end files an AA01 in November 2026 to shorten its current period to 31 December 2026. The accounts for that 9-month period are due by 30 September 2027, which is later than 3 months after the form arrived.

Tell HMRC too: after lengthening a year, update the accounting period dates before the original CT600 filing date to avoid a late filing penalty. A Corporation Tax accounting period cannot exceed 12 months, so a period extended beyond 12 months becomes two accounting periods, each with its own CT600.

SmartFiling’s deadlines guide covers the rules for changing your accounting reference date.

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Read your balance sheet from the top: what the company owns (its assets), less what it owes (its liabilities), gives net assets, which must equal the capital and reserves that belong to the shareholders. The two figures always match because they describe the same value from two sides: what the company holds, and where that value came from.

A simple micro-entity balance sheet at 31 March 2027 might look like this:

What each line tells you:

• Fixed assets: equipment, vehicles, property and other items kept for more than a year, shown after depreciation.
• Current assets: cash at bank, money customers owe, stock, and any money a director owes the company.
• Creditors due within one year: suppliers, Corporation Tax, VAT, PAYE and other amounts payable in the next 12 months, including money the company owes a director.
• Net current assets: current assets less short-term creditors (£52,000 less £20,000). A positive figure means the company holds more short-term resources than it owes over the next year.
• Creditors due after more than one year: longer-term bank loans and finance agreements.
• Capital and reserves: share capital, often £1 or £100 in an owner-managed company, plus the profit and loss reserve. That reserve, also called retained earnings, is accumulated profit since incorporation less dividends and losses.

Four checks worth making:

1. Is capital and reserves positive? A negative figure means net liabilities: the company owes more than it owns.
2. Does the profit and loss reserve cover your dividends? A company must not pay out more in dividends than its available profits from current and previous years.
3. What makes up current assets? A healthy total can be mostly unpaid customer invoices rather than cash.
4. Is a director’s loan overdrawn? If it is still outstanding 9 months and 1 day after the year end, the company may owe an extra tax charge under section 455.

One figure is often misread. The “balance sheet total” used in the micro-entity size test is total fixed and current assets (£60,000 here), not net assets (£35,000).

SmartFiling’s guide to balance sheet basics for directors reads a full FRS 105 balance sheet line by line, including the smaller lines left out above.

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Filing annual accounts at Companies House is free, and HMRC charges no fee to receive a CT600, so the real cost is software or an accountant’s fee. SmartFiling’s published price for micro-entity accounts with the CT600 starts from £299 for companies with turnover under £40,000, with the final quote depending on the state of the company’s records.

What you pay depends on the route you choose:

• Doing it yourself: a commercial software subscription that can produce iXBRL accounts and file the CT600, plus your own time. HMRC’s free CATO service closed on 31 March 2026, so the CT600 now has to go through commercial software.
• Using an accountant or filing service: a fee for preparing the accounts, the Corporation Tax computation and both filings.

Some costs are not accounts fees at all. The confirmation statement is a separate annual Companies House filing with a £50 fee online (£110 on paper). Any Corporation Tax is paid by the company directly to HMRC.

SmartFiling’s starting price covers FRS 105 accounts, the CT600, iXBRL tagging and filing with both Companies House and HMRC, reviewed by an ICAEW Chartered Accountant, within 7 working days of receiving complete records. Express filing costs an extra £150, subject to availability. Transaction volumes and records that need catching up can raise the quote.

On the starting price, a micro-entity with turnover under £40,000 pays £299. Filing the same accounts up to a month late would add a £150 Companies House penalty, and a late CT600 brings a separate £200 HMRC penalty.

SmartFiling’s guide explains what filing company accounts costs in the UK across the main routes, and the pricing page lists SmartFiling’s fixed fees for each service.

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Corporation Tax is the tax UK limited companies pay on their taxable profits. The company works out the tax itself, reports it to HM Revenue and Customs (HMRC) on its Company Tax Return (the CT600) and pays it without receiving a bill. For the financial year starting 1 April 2026, the rate is 19% on profits of £50,000 or less and 25% on profits over £250,000, with Marginal Relief in between.

Corporation Tax is paid by limited companies, foreign companies with a UK branch or office, and clubs, co-operatives and other unincorporated associations. Sole traders and business partners pay Income Tax through Self Assessment instead.

The tax is charged on taxable total profits, which include trading profits, investment income and chargeable gains from selling assets for more than they cost. A UK-resident company pays on its profits from the UK and abroad.

Taxable profit is not the same as the profit in the accounts. Some costs, such as client entertaining, cannot be deducted. Capital spending is not deducted directly, although the company may claim capital allowances instead. Dividends paid to shareholders are not a business cost either.

The deadlines are separate:

• Payment: normally 9 months and 1 day after the accounting period ends.
• CT600: 12 months after the accounting period ends.

A company must file even if it made a loss or has no tax to pay, once HMRC has sent it a notice to deliver a Company Tax Return.

A company with an accounting period ending 31 December 2026 pays its Corporation Tax by 1 October 2027 and files its CT600 by 31 December 2027.

SmartFiling’s guide sets out Corporation Tax rates for 2026/27 with worked examples. For the return itself, SmartFiling’s Corporation Tax filing service prepares the computation and files the CT600.

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Corporation Tax is 19% on taxable profits of £50,000 or less and 25% on profits over £250,000, with Marginal Relief producing a rate in between for profits from £50,000 to £250,000. These rates have applied since 1 April 2023 and are unchanged for the financial year running from 1 April 2026 to 31 March 2027.

Corporation Tax rates are set for financial years that run from 1 April to 31 March, so “2026/27” means the financial year 2026. A company pays the rates that applied during its own accounting period.

Marginal Relief works by taxing each pound of profit between £50,000 and £250,000 at an effective 26.5%. The overall rate therefore climbs gradually from 19% towards 25% rather than jumping at £50,000.

The £50,000 and £250,000 limits shrink in two situations:

• Short accounting periods: a period of less than 12 months reduces the limits proportionately.
• Associated companies: the limits are divided by the number of associated companies plus one. A company with three associated companies uses limits of £12,500 and £62,500.

Worked figures for a standalone company with a 12-month accounting period:

The £100,000 figure is 19% of the first £50,000 (£9,500) plus 26.5% of the next £50,000 (£13,250).

SmartFiling’s rates guide shows how much Corporation Tax your company pays at other profit levels, and a separate guide explains how Marginal Relief works step by step.

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Corporation Tax is normally due 9 months and 1 day after the end of the company’s accounting period, which is earlier than the CT600 filing deadline of 12 months. A company with a 31 March 2027 year end must pay by 1 January 2028 and file its return by 31 March 2028. HMRC does not send a bill, so the company must work out the amount and pay on time.

Points that catch companies out:

• Weekends and bank holidays: payment must reach HMRC by the last working day before the deadline, unless you pay by Faster Payments. A 31 March year end always produces a 1 January deadline, which is never a working day, so the money needs to reach HMRC in December unless you use Faster Payments.
• Payment reference: use the 17-character reference for that accounting period. It changes every period, and using an old one can send the money to the wrong bill.
• Large companies: a company with taxable profits over £1.5 million pays in instalments instead.
• Late payment: HMRC charges interest at the Bank of England base rate plus 4%.
• Nothing to pay: tell HMRC using its nil-to-pay form, and still file the CT600.

Paying and filing are separate obligations. A company can pay on time and still get a late filing penalty if the CT600 arrives after the 12-month deadline.

SmartFiling’s guide lists Corporation Tax deadlines by year end for every month. SmartFiling’s Corporation Tax filing service prepares the computation and return, and the company then pays HMRC directly.

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A CT600 is the Company Tax Return a limited company files with HM Revenue and Customs (HMRC) for each accounting period, reporting its taxable profits and the Corporation Tax due. It is filed online with the company’s accounts and tax computation in iXBRL format, normally within 12 months of the end of the accounting period.

The return covers the company’s details, including its 10-digit Unique Taxpayer Reference (UTR), its taxable profits, any reliefs and allowances claimed, and the tax payable. It goes to HMRC with two attachments:

• the statutory accounts
• a Corporation Tax computation, which adjusts the accounting profit to taxable profit

Supplementary pages cover particular situations. CT600A, for example, reports loans from a close company to its participators, which often means an overdrawn director’s loan.

Any company that receives a notice to deliver a Company Tax Return from HMRC must file a CT600, even if it made a loss or has no tax to pay. A Corporation Tax accounting period cannot exceed 12 months, so a company whose first accounts cover 13 months files two CT600s for them.

HMRC’s free CATO filing service closed on 31 March 2026. Returns now go through commercial software or an agent, and a paper return is only allowed with a reasonable excuse or when filing in Welsh.

Filing and paying are separate. For an accounting period ending 31 December 2026, the Corporation Tax is due by 1 October 2027 and the CT600 by 31 December 2027. A late CT600 costs £200 at one day late and a further £200 at three months.

SmartFiling’s guide to your first return explains what goes to HMRC with your first return. To hand the job over, you can file your CT600 with SmartFiling, including the computation and iXBRL tagging.

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The CT600 (Company Tax Return) must be filed with HMRC within 12 months of the end of the accounting period it covers. The return is required even if the company made a loss or owes no tax, once HMRC has sent a notice to deliver it. Paying the tax is a separate step with an earlier deadline, normally 9 months and 1 day after the period ends.

A company with an accounting period ending 31 December 2026 files its CT600 by 31 December 2027 but pays any tax by 1 October 2027.

An accounting period can never exceed 12 months, so first accounts covering a longer period need two returns. Missing the filing date triggers an automatic £200 penalty, covered in what happens if a CT600 is filed late. Both deadlines for every year end are set out in Corporation Tax payment and filing dates.

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No. Filing the CT600 reports the company’s profit and Corporation Tax bill to HMRC, while paying the tax is a separate step with an earlier deadline. Corporation Tax is usually due 9 months and 1 day after the accounting period ends, but the CT600 is not due until 12 months after it. HMRC does not send a bill, so the company must pay without being asked.

A company with a 31 March 2026 year end must pay by 1 January 2027 and file by 31 March 2027.

Companies with taxable profits over £1.5 million pay in instalments instead. If nothing is owed, tell HMRC on its ‘nil to pay’ form, and still file.

SmartFiling’s Corporation Tax filing service prepares the CT600 and tells you what to pay and when. Payment methods are covered in how to pay Corporation Tax.

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Corporation Tax is calculated on a company’s taxable total profits: the profit in its accounts, adjusted for tax rules, plus any chargeable gains. Since 1 April 2023, and still for the year starting 1 April 2026, profits of £50,000 or less are taxed at the 19% small profits rate, profits over £250,000 at the 25% main rate, and profits in between at 25% reduced by Marginal Relief.

The Corporation Tax computation usually follows four steps:

1. Start with the profit before tax shown in the company’s accounts.
2. Add back costs that tax rules do not allow, such as client entertaining.
3. Deduct capital allowances on equipment, vans and other plant and machinery.
4. Apply the rate for that level of taxable total profits, deducting Marginal Relief where profits fall between the limits.

The £50,000 and £250,000 limits are shared between associated companies and reduced for accounting periods shorter than 12 months. Dividends are paid out of profit after tax, so they do not reduce the bill.

Consider a company with a 12-month accounting period, no associated companies and taxable profits of £80,000. Tax at 25% is £20,000. Marginal Relief is 3/200 of the £170,000 gap between its profits and £250,000, which is £2,550, so the bill is £17,450.

The CT600 reports this figure to HMRC. For more examples, including companies with associated companies, see our worked Corporation Tax calculations. SmartFiling’s Corporation Tax filing service prepares the computation as part of each return.

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You pay Corporation Tax to HMRC by bank transfer (Faster Payments, CHAPS or Bacs), Direct Debit, debit or corporate credit card online, or by approving a payment through your online bank account. Every payment must quote the company’s 17-character Corporation Tax payment reference for the accounting period being paid. HMRC does not send a bill, so the company works out the amount on its CT600 and pays by the deadline.

The payment reference changes with each accounting period. You will find it on the notice to deliver your tax return, on HMRC reminders and in the company’s HMRC business tax account. If your bank has saved HMRC as a payee, update the reference before paying, because a wrong one can delay the payment or put it against a different bill.

Allow time for the money to reach HMRC:

• Same or next day: Faster Payments, CHAPS, online bank approval or card
• 3 working days: Bacs, or a Direct Debit already set up with HMRC
• 5 working days: a Direct Debit set up for the first time

Corporate card payments carry a non-refundable fee, personal credit cards are not accepted and you cannot pay by post.

A company with a 31 March 2026 year end owes its tax by 1 January 2027, a bank holiday. Faster Payments and card payments count on that day, but other methods need the money to reach HMRC by Thursday 31 December 2026.

If nothing is due, tell HMRC using its ‘nil to pay’ form. If the company cannot pay in full, a payment plan with HMRC may help. Our guide to HMRC payment methods and references has the bank details.

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Marginal Relief reduces Corporation Tax for companies with taxable profits between £50,000 and £250,000, so their overall rate sits between the 19% small profits rate and the 25% main rate. The company works out tax at 25% and then deducts the relief on its CT600. The relief shrinks as profits rise and disappears at £250,000.

In the simplest case (a 12-month accounting period, no associated companies and no dividends received from other companies), the relief is 3/200 of the difference between £250,000 and the company’s profits. A company with profits of £100,000 pays £25,000 at the main rate, less £2,250 of relief, leaving £22,750.

The limits are divided by the number of associated companies plus one and reduced for short accounting periods. Within the band, each extra £1 of profit is taxed at 26.5%. See Marginal Relief explained with worked numbers.

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You can reduce Corporation Tax legally by claiming every allowable business expense and capital allowance, paying employer pension contributions, choosing a sensible mix of salary and dividends, and timing equipment purchases before the year end. Each of these lowers taxable total profits using rules HMRC expects companies to use. None of them works unless the spending is genuinely for the business.

The main options:

• Claim every allowable cost. Costs incurred wholly and exclusively for the business reduce taxable profit. Business entertaining and most gifts are blocked, even when genuine.
• Use capital allowances. The Annual Investment Allowance gives a 100% deduction on up to £1 million a year of most plant and machinery, such as equipment, tools and vans. Companies can also claim full expensing on new, unused plant and machinery. Cars qualify for neither, and companies controlled by the same person share one AIA.
• Time purchases. The AIA and full expensing are claimed in the accounting period the item was bought, normally the contract date if payment is due within 4 months. Buying equipment you need just before the year end brings the relief forward by a year.
• Pay pension contributions through the company. Employer contributions to a registered pension scheme are deductible when made wholly and exclusively for the business, and relief is given for the period in which they are actually paid.
• Balance salary and dividends. A director’s salary is normally deductible if paid wholly and exclusively for the business. Dividends are not a business cost for Corporation Tax.

Profits between £50,000 and £250,000 are where these steps save most. A company with £120,000 of taxable profit, a 12-month period and no associated companies pays 26.5% on each extra £1 in that band, so buying a £10,000 van before the year end and claiming AIA cuts its bill by £2,650.

Do not spend purely to save tax. That same £10,000 still leaves the company at least £7,350 worse off.

Our guide to 12 legitimate ways to reduce Corporation Tax covers each option in depth. SmartFiling’s Corporation Tax filing service claims capital allowances and includes tax planning pointers with every return.

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HMRC charges an automatic £200 penalty if a CT600 is filed even one day late, and another £200 once it is 3 months late. At 6 months, HMRC estimates the Corporation Tax bill and adds a penalty of 10% of the unpaid tax, with a further 10% at 12 months. The flat amounts doubled for returns with a filing date on or after 1 April 2026.

If a return is late 3 times in a row, each £200 penalty rises to £1,000. The flat penalties apply even when there is no tax to pay. Any tax paid after its own due date also attracts late payment interest at the Bank of England base rate plus 4%.

The 6-month estimate is called a tax determination and cannot be appealed. The company must pay the tax and file the real return, and HMRC then recalculates the interest and penalties. If you had a reasonable excuse, you can appeal a late filing penalty online, but only after the CT600 has been filed.

A company whose return was due on 31 December 2026 and is filed on 15 April 2027 is more than 3 months late, so it faces £400 in flat penalties.

For the full rules, see Corporation Tax late filing penalties. If a return is already overdue, SmartFiling’s Corporation Tax filing service can prepare and submit it.

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Since HMRC’s free Company Accounts and Tax Online (CATO) service closed on 31 March 2026, you must file a CT600 using commercial software or ask an accountant to file it for you. The return must include the company’s accounts and Corporation Tax computation in iXBRL format. HMRC only accepts a paper CT600 if you have a reasonable excuse or are filing in Welsh.

The rule applies to every return filed from 1 April 2026, including returns for accounting periods that ended while CATO was still open.

Filing it yourself with software

HMRC publishes a list of commercial software suppliers. Before paying for a product, check that it can produce all three parts HMRC needs:

• the CT600 itself
• the Corporation Tax computation
• the company accounts, tagged in iXBRL

Some products file the accounts with Companies House at the same time. Others file only with HMRC, leaving you to deliver the accounts to Companies House separately.

Using an accountant

You appoint the accountant as the company’s agent with HMRC. The accountant prepares the computation, tags the accounts and submits the return once you have approved it.

Companies House is a separate filing

Filing annual accounts with Companies House is still free, and WebFiling continues to accept accounts until software-only filing starts on 1 April 2028. Amendments to a CT600 also go through software, an agent or a paper return sent to HMRC’s Corporation Tax office.

A company with a 31 December 2025 year end has until 31 December 2026 to file its CT600. Its year ended while CATO was open, but because the return is filed after 31 March 2026, it needs software or an agent.

For the DIY route, see filing your own CT600 after CATO. If you would rather hand it over, SmartFiling’s CT600 filing service prepares the computation and the iXBRL-tagged return and submits it after you approve it.

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If a company’s first accounts cover more than 12 months, HMRC splits them into two accounting periods: the first 12 months, then a second period for the remaining time. A Corporation Tax accounting period can never exceed 12 months, so the company files a separate CT600 for each period, and each period has its own Corporation Tax payment date.

A long first period is common because a company’s first accounting reference date is the last day of the month in which the first anniversary of incorporation falls, so first accounts usually run slightly over a year. The first accounting period for Corporation Tax starts when the company starts to do business, though. If trading began a few weeks after incorporation, the first period may be 12 months or less and one return is usually enough, as long as Corporation Tax services were added to the business tax account before the accounting reference date. If they were not, HMRC expects a separate return for the dormant period as well.

Take a company incorporated on 10 March 2025 that starts trading the same day and makes up its first accounts to 31 March 2026:

• Period 1: 10 March 2025 to 9 March 2026, tax due 10 December 2026
• Period 2: 10 March 2026 to 31 March 2026, tax due 1 January 2027
• Both CT600s due by 31 March 2027, 12 months after the accounts end

The accounts profit is divided between the two returns, and the £50,000 and £250,000 Corporation Tax limits are scaled down for the short second period. Check that HMRC’s letter confirming your accounting period dates matches, and tell HMRC if it does not.

See how the first two accounting periods work for more detail. SmartFiling’s Corporation Tax filing service prepares both returns.

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A company’s Unique Taxpayer Reference (UTR) is the 10-digit number on the CT41G letter HMRC posts to the registered office shortly after incorporation. It also appears on later HMRC letters, such as notices to file and payment reminders, on previous Company Tax Returns, and in the company’s HMRC business tax account once the UTR has been added to it.

If you cannot find it, request a copy online using the company registration number and the company’s registered name. HMRC sends the UTR by post to the registered office shown at Companies House. For a newly registered company, allow 15 working days before asking.

With the UTR, you can add Corporation Tax to the business tax account, as explained in our guide to telling HMRC your company is active.

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If your company can’t pay its Corporation Tax in full, contact HMRC as soon as possible to ask for a payment plan, often called a Time to Pay arrangement. HMRC may let the company pay in monthly instalments if the plan is realistic and affordable, but interest keeps running on the unpaid tax until it is cleared.

HMRC will ask how the company can pay as quickly as possible. Expect questions about:

• the company’s income and spending
• how much it can pay each month
• other taxes it owes
• assets it could sell, such as stock, vehicles or shares

HMRC expects the debt to be reduced as far as possible first. It may ask directors to put personal funds into the business, borrow or extend credit. You will need the company’s tax reference and UK bank details to set up a Direct Debit for the instalments.

Late payment interest runs at the Bank of England base rate plus 4%, so paying more each month lowers the total cost. A payment plan does not move the CT600 deadline, and late filing penalties are charged separately, so file the return on time.

Ignoring the debt is the worst option. If a company does not contact HMRC or cannot agree a plan, HMRC can pass the debt to a debt collection agency, take the company to court or close the company down.

Once a plan is agreed, paying Corporation Tax explains the payment methods and references to use.

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A confirmation statement (form CS01) is the filing every UK company makes to Companies House at least once every 12 months to confirm that the information on the public register is correct. It covers details such as directors, the registered office, shareholders, share capital and people with significant control. Dormant and non-trading companies must file one too, even if nothing has changed.

A confirmation statement contains no financial figures; those go in the annual accounts, a separate filing. Changes to directors, the company secretary, PSCs, the registered office or the registered email address must be filed before the statement. Other changes, such as a new SIC code, shareholder details or the statement of capital, can be made within the statement itself.

When filing, the company also confirms that its intended future activities are lawful. Since 18 November 2025 the statement must include each director’s Companies House personal code, and Companies House will not accept it until every director has verified their identity.

The main rules:

• Deadline: within 14 days after the end of the review period
• Fee: £50 online or £110 on paper, once in each 12-month payment period
• Not filing: an offence that can lead to a fine and the company being struck off

For a fuller explanation, see confirmation statements explained. When you are ready to submit, our guide shows how to file a confirmation statement online.

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A confirmation statement is due within 14 days after the end of the company’s review period. A new company’s first review period is the 12 months starting on the day it was incorporated. After that, each review period ends 12 months after the confirmation date on the last statement. The next statement date and deadline are shown on the company’s Companies House register entry.

A company incorporated on 10 October 2025 has a first review period ending 9 October 2026, so its first confirmation statement must reach Companies House by 23 October 2026.

You can file early, which sets a new confirmation date and restarts the 12-month cycle. Companies House will not accept the statement until every director has given a personal code, so leave time for identity verification. Review periods are explained further in confirmation statement deadlines.

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A confirmation statement costs £50 to file online or £110 on a paper CS01 form, the Companies House fees in force since 1 February 2026. The fee applies even when nothing has changed and even if the company is dormant. It is paid to Companies House, separately from any accountant’s charge.

The fee is charged once per 12-month payment period. A second statement filed in the same payment period, for example to record a change, costs nothing extra. If a payment period runs from 1 January to 31 December 2026, a statement filed on 30 September 2026 costs £50, another on 1 December 2026 is free, and one filed on 5 January 2027 costs £50 again.

Filing annual accounts at Companies House is free. See what a confirmation statement costs for more, or read about filing for dormant companies.

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You file a confirmation statement online with Companies House: sign in to WebFiling with GOV.UK One Login, enter the company number and its authentication code, check each section, give each director’s Companies House personal code and pay the £50 fee. A paper CS01 costs £110 and takes longer. Companies House aims to process most online filings within 24 hours.

1. Check the company’s details on the register. File any changes to directors, the secretary, PSCs, the registered office or the registered email address first.
2. Make sure every director has verified their identity and has a Companies House personal code. Without every code, the statement will be rejected.
3. Sign in to WebFiling. Since 13 October 2025, WebFiling accounts must be connected to GOV.UK One Login.
4. Enter the company number and the authentication code, then work through the SIC code, statement of capital, shareholder and PSC sections.
5. Confirm the company’s intended future activities are lawful, add a registered email address if you have not given one, and pay.

Some companies can use Companies House’s simpler “File a confirmation statement” service instead. It suits private companies limited by shares with one shareholder, 1 to 5 officers, 5 or fewer PSCs and all directors’ personal codes already provided, where nothing needs changing. It uses a Companies House account rather than a WebFiling account.

An accountant can file for you using the company’s authentication code. Our step-by-step CS01 filing guide walks through each section.

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If a confirmation statement is overdue, there is no automatic late filing penalty, but the company and every officer in default commit an offence, and Companies House can start striking the company off the register. Companies House may also issue a financial penalty, and warns of fines of up to £5,000 for not filing. Filing the overdue statement is the quickest way to stop further action.

The statement is due within 14 days after the end of the review period. If the review period ended on 31 August 2026, the deadline was 14 September 2026.

If the statement stays outstanding, Companies House can publish a First Gazette notice for compulsory strike-off. The company can then be dissolved at least 2 months later unless the filing is made or an objection is lodged. A dissolved company’s remaining assets, including money in its bank account, pass to the Crown.

To catch up, file online in the usual way. The fee is the normal £50, with no surcharge. A late statement must still use a confirmation date no later than the last day of the missed review period, so your future dates do not move.

Identity verification is a common hold-up. Companies House will not accept the statement until every director has verified and provided a personal code, so check that first.

See what to do about an overdue confirmation statement for the steps, or read about the First Gazette notice if one has already been published.

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Annual accounts report a company’s finances for its financial year, while a confirmation statement confirms the company’s details on the Companies House register, such as its directors, shareholders and people with significant control. Every company must file both each year, including dormant companies, but they have separate deadlines, different content and different fees.

The two deadlines run on different cycles. The accounts deadline follows the accounting reference date, while the confirmation statement follows the incorporation date or the last confirmation date. A company with a 31 March year end and a confirmation date of 9 June files its confirmation statement by 23 June 2026 and its accounts for the year to 31 March 2026 by 31 December 2026.

For the details of each filing, see what annual accounts include and confirmation statements explained. The accounts deadline is covered in when company accounts are due.

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A Companies House authentication code is a 6-character code of letters and numbers that Companies House issues to each company to authorise online filings, acting as the equivalent of an officer’s signature. To get one, sign in to or create a Companies House WebFiling account and request it. Companies House posts the code to the company’s registered office, which can take up to 10 working days.

You need the code to file through WebFiling, the Find and update company information service or commercial software, for example to file a confirmation statement, annual accounts or a change of director. If the company already has a code, a request produces a reminder of the existing one. Companies House will not send the code by email or give it out over the phone. If you cannot access the registered office, you can ask for the code to go to your home address instead.

Treat the code like a bank card PIN, because anyone who knows it can change the company’s details online:

• change it in WebFiling if a former accountant or member of staff knows it
• tell anyone who files for you when you change it, as the old code stops working
• request it well before a deadline, since post can be slower in busy periods

The authentication code is not the same as a Companies House personal code, the 11-character code a person receives after verifying their identity. Nor is it the company’s UTR, which comes from HMRC.

To see where the authentication code is used in practice, follow our confirmation statement filing guide.

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Yes, if you are a company director or a person with significant control (PSC). Identity verification has been a legal requirement since 18 November 2025. New directors verify before they are appointed, and existing directors give their Companies House personal code in their company’s next confirmation statement filed after that date. PSCs verify within a 14-day period that depends on their situation.

You only verify once, even if you hold several roles. Verification gives you an 11-character Companies House personal code, which you then provide for each company and role. You can verify:

• online or at a Post Office using GOV.UK One Login
• through an Authorised Corporate Service Provider (ACSP), a Companies House authorised agent such as an accountant

The 14-day window for a person with significant control works like this:

• a PSC who is also a director: 14 days starting the day after the company’s confirmation statement date
• a PSC who is not a director: the first 14 days of their birth month
• someone who became a PSC after 18 November 2025: when added to the register or within 14 days of it

Companies House will not accept a confirmation statement until every director has verified. A director whose company’s review period ends on 9 October 2026 needs a personal code before the statement due on 23 October 2026.

People who only file on a company’s behalf do not need to verify yet; Companies House will introduce that later. For the practical steps, see what directors must do to verify.

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Your Companies House personal code is the 11-character code you get when you verify your identity for Companies House. If you verified with GOV.UK One Login, sign in to your Companies House account with the same email address and open ‘Manage account’ to see it. If an authorised agent (ACSP) verified you, Companies House emailed the code to the address the agent gave for you.

If you verified through GOV.UK One Login after 8 July 2026, the code was also emailed to you. If an agent verified you and nothing arrived, ask the agent which email address it supplied, then save the code to your Companies House account.

One code covers every directorship and PSC role you hold. Our guide explains your Companies House personal code and when to use it.

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A person with significant control (PSC) is someone who owns or controls a UK company. A person is usually a PSC if they hold more than 25% of the shares or voting rights, can appoint or remove a majority of the directors, or otherwise have significant influence or control over the company. A company can have several PSCs, or none.

The test is “more than 25%”, so exactly 25% is not enough. Two 50% shareholders are both PSCs. With four 25% shareholders and no other control, the company has no PSC and must tell Companies House so.

PSC details go to Companies House at incorporation, and changes must be reported within 14 days of confirming them. Each PSC must also verify their identity and give their personal code within a 14-day window; see our PSC verification rules.

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Companies House is the UK registrar of companies. It keeps the public register and receives each company’s annual accounts, confirmation statement and changes to directors, people with significant control and the registered office. HM Revenue and Customs (HMRC) is the tax authority. It collects Corporation Tax, VAT and PAYE from companies and Income Tax from individuals. Most limited companies file with both, on different deadlines.

The same year-end accounts go to both, but filing with one does not count as filing with the other. Software can often send the accounts and the CT600 together for a private company that does not need an audit.

A company with a 31 March 2026 year end files accounts at Companies House by 31 December 2026, pays Corporation Tax to HMRC by 1 January 2027 and files its CT600 by 31 March 2027. Each body charges its own late filing penalties.

Our guide to who receives your company accounts explains the accounts side. SmartFiling’s micro-entity accounts and CT600 filing service covers both filings in one job.

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Since 1 February 2026 the main Companies House fees are £50 to file a confirmation statement online (£110 on paper), £100 to incorporate a company online (£124 on paper) and £13 to apply online for voluntary strike-off (£18 on paper). Filing annual accounts is free, including dormant accounts.

The confirmation statement fee is paid with the first statement in each 12-month period. Late filing penalties for accounts, from £150 to £1,500 for a private company, are separate from these fees. Accountant or software costs sit on top; see what filing company accounts costs.

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No. Companies House WebFiling is not closing, but from 1 April 2028 it will stop accepting annual accounts. From then, every company must file its accounts through commercial software in iXBRL format, including dormant and revised accounts. WebFiling stays open for other filings, such as confirmation statements and changes to director details.

The same April 2028 package, made under the Economic Crime and Corporate Transparency Act 2023, also:

• ends paper filing of accounts
• requires micro-entities and small companies to file a profit and loss account, with an option to keep it off the public register (the method has not yet been published)
• removes abridged accounts

Access to WebFiling has already changed. Since 13 October 2025, you sign in with GOV.UK One Login, and you may need each company’s authentication code when you connect your account.

Accounts for a year ending 30 June 2028 are due by 31 March 2029, so they will need software even if the company is dormant. HMRC’s free CATO service closed on 31 March 2026, so the CT600 already needs software or an agent.

If you currently file yourself, our guide to filing company accounts yourself sets out the options. SmartFiling’s micro-entity accounts filing files through software with Companies House and HMRC.

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An authorised corporate service provider (ACSP), also called a Companies House authorised agent, is a business or sole trader registered with Companies House and supervised by a UK anti-money laundering (AML) body. For now, your accountant only needs to be an ACSP if it will verify your identity for Companies House. From no earlier than November 2027, any agent filing on behalf of a company will need to be an ACSP.

Registration opened on 18 March 2025. The person applying must hold a senior role in the business and verify their own identity, and the business must stay AML supervised. An ACSP that verifies clients must keep records of those checks for 7 years. Companies House can suspend or cancel an agent that breaks the rules, and it publishes a list of registered ACSPs.

You do not need an agent to verify yourself. The GOV.UK One Login route is free, while an ACSP may charge a fee. The agent route is useful if you prefer to hand the check to an adviser you already use.

The later change affects filing rather than verification. Companies House plans to make identity checks compulsory for anyone filing documents and to require third-party agents to register as ACSPs, with at least 6 months’ notice before either starts. If your accountant files your accounts or confirmation statement, ask now whether they are registered.

Our guide covers verifying through an authorised agent and the deadlines for directors and PSCs.

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Yes. You can use your home as your company’s registered office if it is an ‘appropriate address’: a physical address in the UK, in the same country the company is registered in, where post will reach someone acting for the company and delivery can be confirmed. The address will be shown on the public Companies House register, so anyone can see it.

The appropriate address rules have applied since 4 March 2024:

• A Royal Mail PO Box, or a similar service from another provider, cannot be used.
• A company registered in Scotland needs a Scottish address; a company registered in England and Wales needs one in England or Wales.
• If Companies House decides the address is not appropriate, it can move the company to a default address. The company then has 28 days to register a proper address or it risks being struck off.

Privacy is the main drawback. Companies House advises not to use an address you want kept private, and suggests an accountant’s or solicitor’s address (with their permission) or an agent’s address instead. Since 27 January 2025, individuals can apply to have a home address that was used as a registered office suppressed on the register.

The registered office also receives important post, including HMRC’s CT41G letter with the company’s UTR and the Companies House authentication code, so someone needs to check it.

You can change the registered office address with form AD01, and the address is confirmed again when confirming your company details each year.

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A dormant company is a limited company that is inactive, but Companies House and HMRC use different tests. Companies House treats a company as dormant if it has had no significant accounting transactions in its financial year. HMRC treats a company as dormant for Corporation Tax if it is not trading and has no other income, such as interest or investment income. A company can pass one test and fail the other.

The Companies House test

A significant accounting transaction is one the company should record in its accounting records. Only a few items can be ignored: money paid for shares at incorporation, fees paid to Companies House (for example for a confirmation statement or change of name) and penalties for late filing of accounts. A bank charge or a single sale normally breaks dormancy.

The HMRC test

HMRC counts buying, selling, renting out property, advertising, employing someone and receiving interest as activity. A new company that has not started trading, or one that has stopped and has no income, is usually dormant for Corporation Tax.

A company that stops trading but leaves £20,000 in an interest-paying account is not dormant for HMRC, because the interest is income. The interest is also a transaction Companies House counts, so it cannot file dormant company accounts either.

Dormancy never removes the duty to file accounts and a confirmation statement each year. Our guide to the HMRC and Companies House definitions of dormant compares them in detail, and the dormant company accounts service handles the annual filing.

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Yes. A dormant limited company must still file annual accounts with Companies House every year. A company that is dormant for Companies House (no significant accounting transactions) can usually file simpler dormant company accounts: a balance sheet with a statement that the company was dormant, and no profit and loss account or directors’ report. It must also file a confirmation statement every year.

Dormant accounts have the same deadline as any other accounts, normally 9 months after the accounting reference date. The same Companies House late filing penalties apply, from £150 to £1,500 for a private company, doubled if the previous year’s accounts were also late.

How dormant accounts are filed:

• online through Companies House, which has built-in checks, but only if the company has never traded
• on paper form AA02, but only if the company has been dormant since incorporation
• using commercial software, or as paper accounts, if the company became dormant after trading
• from 1 April 2028, through commercial software only, like all other accounts

Most dormant companies can also claim exemption from audit, and a dormant subsidiary of a UK parent may be exempt from filing if it meets the conditions. Once HMRC has been told the company is dormant, no Company Tax Return is needed unless HMRC sends a notice to deliver one. A company that has not told HMRC it is dormant is still expected to file.

A dormant company with a 31 March 2026 year end must file by 31 December 2026. If the accounts arrive on 20 January 2027, less than a month late, the penalty is £150.

SmartFiling’s dormant company accounts service prepares and files them. To do it yourself, see how to file dormant accounts (AA02).

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A dormant company does not need to file a Company Tax Return (CT600) once HMRC has accepted that it is dormant for Corporation Tax, unless HMRC sends it a ‘notice to deliver a Company Tax Return’. If a notice arrives, the company must file online, even though the return shows no profit and no tax. HMRC’s guidance says a company that has not told HMRC it is dormant is still required to file.

HMRC’s dormant test looks at income as well as trade. A company that has stopped trading but still earns bank interest, rent or other income is within the charge to Corporation Tax, so it needs a CT600 for each accounting period. This is where dormant and non-trading companies part ways.

A late CT600 attracts penalties even when no tax is due. For returns with a filing date on or after 1 April 2026, the penalty is £200 once the return is a day late and a further £200 at three months.

HMRC’s free CATO filing service closed on 31 March 2026, so any CT600 now goes through commercial software or an agent.

Suppose HMRC issues a notice to deliver for the year ended 31 March 2026 to a company it has not recorded as dormant. The return for that period is normally due by 31 March 2027, 12 months after the period ended.

To stop future notices, follow our steps on how to tell HMRC your company is dormant. Companies House filings continue regardless, and our dormant company accounts service covers them.

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A dormant company has no significant accounting transactions and no income, so it can file dormant accounts and usually needs no Company Tax Return. A non-trading company has stopped or never started trading but still has some activity, such as bank interest, rent or bank charges. ‘Non-trading’ is a description rather than a filing status, and it can mean the company needs normal accounts and a CT600.

Companies House and HMRC apply separate tests, so the same company can land differently with each:

The expensive mistakes sit in the last two rows. Dormant accounts filed for a company that had transactions do not meet the Companies Act requirements. A company that skips its CT600 because it “isn’t trading” can face a £200 late filing penalty even with no tax due.

A consultancy that stops trading in 2026 and keeps £50,000 on deposit earns interest. HMRC expects a CT600 for the interest, and Companies House expects normal accounts, not dormant company accounts.

Both types still file a confirmation statement every year. Our guide to dormant vs non-trading companies works through more cases, and the dormant company accounts service starts with a dormancy check.

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You tell HMRC your company is dormant using HMRC’s online service ‘Tell HMRC your company is dormant for Corporation Tax’, or by phone or post if you cannot use it. You need the company name, its 10-digit Unique Taxpayer Reference (UTR) and, if the company has traded, the date trading stopped. A company that traded must still file a Company Tax Return for its final trading period.

Once HMRC accepts the notification, the company does not file another CT600 unless HMRC asks for one or the company starts trading again. Tax agents can use the same service with their agent code.

Two other HMRC registrations need attention when trading stops:

• VAT: cancel the registration within 30 days if the company will not trade again, or keep filing nil returns if it will.
• PAYE: close the payroll scheme if trading will not restart in the current tax year.

A company with a 31 December year end that stops trading on 31 March 2026 has a Corporation Tax accounting period ending that day. It files a CT600 for 1 January to 31 March 2026 by 31 March 2027 and pays any tax by 1 January 2027.

Telling HMRC changes nothing at Companies House, where accounts and a confirmation statement are still due every year. If the company becomes active again, it must tell HMRC within 3 months of becoming active by registering for Corporation Tax through its HMRC business tax account.

Our guide to telling HMRC your company is dormant has the full steps, and the dormant company accounts service keeps the Companies House side up to date.

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The unavoidable cost of keeping a dormant company is the Companies House confirmation statement fee: £50 a year online, or £110 on paper, since 1 February 2026. Filing dormant accounts at Companies House is free, and a company HMRC accepts as dormant normally has no Corporation Tax or CT600 to deal with. The other cost is any accountant’s fee for preparing the accounts.

Other costs to allow for:

• a registered office service, if you do not use your own address
• late filing penalties from £150 if the accounts miss their deadline
• software or an agent from 1 April 2028, when all accounts, including dormant accounts, must be filed through software

SmartFiling prepares and files fixed-fee dormant company accounts. For DIY and accountant options side by side, see dormant accounts costs.

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A First Gazette notice for compulsory strike-off is a public notice from Companies House saying it intends to remove a company from the register because it believes the company is no longer carrying on business, usually after accounts or a confirmation statement have gone unfiled. Unless Companies House is given a reason not to, the company can be struck off no sooner than 2 months after the notice and then dissolved.

Before the notice, Companies House normally writes to the registered office to ask whether the company is still in business. The notice appears in The Gazette for the part of the UK where the company is registered (London, Edinburgh or Belfast) and on the company’s public record. A second notice confirms dissolution.

To stop compulsory strike-off, reply promptly to any letters and file the overdue documents as soon as possible. Late accounts still attract a penalty.

Creditors and other interested parties can object once the notice is published. An objection made online must be submitted before the strike-off date, while one sent by email or post must arrive at least 2 weeks before it. From 1 December 2026 objections can only be made online.

If the notice is published on 6 October 2026, the company cannot be struck off before 6 December 2026.

If the company is dissolved, its bank account is frozen and its assets pass to the Crown as bona vacantia. A company struck off by Companies House while still in business can apply for administrative restoration within 6 years.

The usual trigger is covered in fixing an overdue confirmation statement, and the fines are set out in late accounts penalties.

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You can close a solvent limited company by applying to Companies House for voluntary strike-off on form DS01, or through a members’ voluntary liquidation (MVL). An insolvent company, one that cannot pay its debts, is normally closed through a creditors’ voluntary liquidation (CVL) or compulsory liquidation. The right route depends on whether the company can pay its debts and how much money is left.

The main routes

Striking off is usually the cheapest option. For an MVL, the directors must make a declaration of solvency confirming the company can pay its debts within 12 months.

Before a strike-off application

1. File final accounts and a final Company Tax Return (CT600) with HMRC and pay any Corporation Tax. Final accounts do not need to go to Companies House.
2. Close the PAYE scheme and cancel the VAT registration.
3. Pay debts, claim any HMRC refund and distribute what is left to shareholders.
4. Close the bank account. Anything left at dissolution passes to the Crown as bona vacantia.

The £25,000 limit

Money distributed ahead of a strike-off is taxed as a capital gain only if the total is £25,000 or less. Above that, the whole amount is treated as income. The limit does not apply to distributions by a liquidator, which is why companies with larger reserves often compare an MVL.

A company with £18,000 left after paying its debts can distribute it and then apply to strike off. With £60,000 left, all £60,000 would be taxed as income on a strike-off.

Keeping the company instead

If you might use the company again, you can leave it dormant for as long as you like, filing accounts and a confirmation statement each year. See keeping a company dormant instead, or SmartFiling’s dormant company accounts service for the yearly filing.

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To strike off a company, a majority of its directors apply to Companies House on form DS01, online for £13 or on paper for £18. Within 7 days you must send a copy to everyone with an interest, including shareholders, creditors, HMRC and employees. Companies House then publishes a notice in The Gazette, and the company is dissolved no sooner than 2 months later if nobody objects.

Check the company is eligible

In the 3 months before applying, the company must not have:

• traded or carried on business
• changed its name
• sold stock or anything else it held for sale in the normal course of business (selling an old delivery van is fine)

It also cannot apply if it is in, or facing, insolvency proceedings or has an arrangement with its creditors. Activity needed to wind things up, such as paying debts or professional fees, is allowed.

Close down properly first

• File final accounts and a CT600 with HMRC and pay any Corporation Tax.
• Claim any HMRC refund before applying, because HMRC cannot pay a dissolved company.
• Close the PAYE scheme and cancel VAT.
• Pay debts, distribute what is left and close the bank account. Anything remaining passes to the Crown as bona vacantia.

Apply and tell people

Apply online through Companies House and pay £13 by card. On paper, pay £18 by cheque or postal order, not drawn on the company’s own account. Send the copy to shareholders, creditors (including HMRC and the Department for Work and Pensions), employees, pension fund trustees and any director who did not sign. Failing to notify them is an offence.

What happens next

A company last traded on 30 June 2026. Its directors apply online on 1 October 2026 and post copies to interested parties by 8 October. If the Gazette notice appears on 13 October 2026, the earliest strike-off date is 13 December 2026, and the company is dissolved when a second notice is published.

If the company becomes ineligible, for example because it starts trading again, the application must be withdrawn online or on form DS02, which one director can sign. Compulsory strike-off is a separate process started by Companies House.

If the company may be useful later, the dormant company rules explain how to keep it on the register instead.

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Money and assets left in a company when it is dissolved become bona vacantia (ownerless property) and pass to the Crown. That includes the bank balance, which is frozen from the date of dissolution, and money the company would have received later, such as an HMRC refund. Getting it back normally means restoring the company to the register, so cash should be paid out before the company closes.

The Crown body depends on location. The Government Legal Department’s Bona Vacantia Division handles most companies in England and Wales, with separate solicitors for registered offices in Lancashire and Cornwall. In Scotland it is the King’s and Lord Treasurer’s Remembrancer, and in Northern Ireland the Crown Solicitor.

There are two ways back:

• Administrative restoration through Companies House, on form RT01 with a £341 fee. It is only available within 6 years of dissolution, to a former director or shareholder, where Companies House struck the company off while it was still in business. Overdue filings must be brought up to date, and a bona vacantia waiver letter is needed if assets passed to the Crown.
• Company restoration by court order, generally within 6 years. This is the route after a voluntary strike-off on form DS01.

A company is struck off with £4,000 in its bank account, and an £800 Corporation Tax refund was still due from HMRC. Both sums belong to the Crown, and the directors would have to restore the company to recover them.

Before applying to close, pay out surplus cash; taking money out of a limited company compares the options. On a strike-off, distributions totalling more than £25,000 are taxed as income.

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Company directors do not automatically need to file a Self Assessment tax return, and being a director is not on HMRC’s list of reasons to file. You must file if HMRC sends you a notice to file or your dividends exceed £10,000, and you may need to if you have other untaxed income, such as rent, savings interest or foreign income. Smaller taxable dividends can often be collected through your tax code instead.

How dividends affect it in 2026/27:

• Dividends covered by the £500 dividend allowance and any unused personal allowance: nothing to report.
• Taxable dividends up to £10,000: if you do not already file, tell HMRC between 6 April and 5 October after the tax year, either by asking for a tax code change or through the helpline.
• Dividends over £10,000: you must file a Self Assessment return.

Other common triggers are self-employed income over £1,000, Capital Gains Tax to pay and the High Income Child Benefit Charge.

A director takes a £12,570 salary and £20,000 of dividends in 2026/27. The dividends exceed £10,000, so the director registers for Self Assessment by 5 October 2027 if not already registered, then files and pays by 31 January 2028. The tax is £2,096.25: £19,500 above the allowance at 10.75%. Because that bill is over £1,000 and none of it was collected through PAYE, a first payment on account of about £1,048 towards 2027/28 is normally due on 31 January 2028 as well, with a second on 31 July 2028.

If HMRC has issued a notice to file, a return is required even when no tax is due. Our guide to Self Assessment for limited company directors covers benefits and director’s loans too, and SmartFiling’s Self Assessment tax return service can file it for you.

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For most single-director companies in 2026/27, a salary of £12,570 (the personal allowance) is the most tax-efficient, with the rest of the director’s income taken as dividends. The salary is free of Income Tax and employee National Insurance, earns a qualifying year for the State Pension and is deductible for Corporation Tax. The company pays £1,135.50 of employer National Insurance on it.

The 2026/27 figures

• Personal allowance and employee NI threshold: £12,570 (standard tax code 1257L)
• Employer National Insurance: 15% on pay above £5,000 a year
• Lower earnings limit for a State Pension qualifying year: £6,708
• Employment Allowance: up to £10,500, but not where the director is the only employee liable for employer NI

Why not £5,000?

A £5,000 salary avoids employer NI, but it sits below the £6,708 lower earnings limit, so the year does not count towards the director’s State Pension.

Why £12,570 usually wins

Raising the salary from £5,000 to £12,570 costs the company £8,705.50: £7,570 of salary plus £1,135.50 of employer NI. At the 19% small profits rate, Corporation Tax relief gives back £1,654.05. Kept as profit and paid as a dividend, the same £8,705.50 would leave £7,051.45, against £7,570 through salary.

The higher salary also uses up personal allowance that would otherwise shelter dividends, so the real gain is smaller: about £463 for a basic-rate director and £333 for a higher-rate director.

When the answer changes

• Above £12,570, salary carries 20% Income Tax, 8% employee NI and 15% employer NI, so a basic-rate director is usually better off taking extra income as a dividend.
• A company with a second employee paid above £5,000 a year can usually claim Employment Allowance, which covers employer NI up to £10,500 a year.
• A director who already takes a salary elsewhere may have used the personal allowance, which changes the sums entirely.

The full workings, including higher Corporation Tax rates, are in our guide to the most tax-efficient director salary. SmartFiling’s payroll service runs the salary through RTI each month.

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To pay a dividend legally, first check the company has enough available profits from the current and previous years, after any losses and the Corporation Tax it owes. Then hold a directors’ meeting to declare the dividend and keep minutes, even if you are the only director. Write a dividend voucher for each payment, give a copy to each shareholder, keep one for the company, and then pay the money.

The rules that catch people out:

• Profit, not cash. A company with money in the bank can still have nothing to distribute. The test is accumulated profits, broadly the retained earnings figure in the accounts.
• All shareholders. Dividends usually go to every shareholder of the same class in proportion to their shares.
• The voucher. Each dividend voucher shows the date, the company name, the shareholders being paid and the amount.

A company made £30,000 profit this year but lost £40,000 last year. It has no available profits, so a dividend paid now would break the rules and could be an unlawful dividend. Where profits do allow it, a £10,000 dividend on a 60/40 shareholding is £6,000 and £4,000.

Dividends are not a business expense for Corporation Tax. In 2026/27 shareholders pay tax on dividends above the £500 allowance at 10.75% (basic rate), 35.75% (higher) or 39.35% (additional).

Our guide to paying a dividend legally, step by step includes minute wording and timing. Accurate year-end accounts that show available profits make the profit check straightforward.

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In 2026/27 every shareholder can receive £500 of dividends tax-free under the dividend allowance. If other income does not use up the £12,570 Personal Allowance, the unused part also covers dividends, so a shareholder with no other income could receive £13,070 of dividends tax-free.

Dividends inside the allowance still count when HMRC works out your tax band. Anything above the allowances is taxed at the 2026/27 dividend tax rates of 10.75%, 35.75% or 39.35%.

A director on a £12,570 salary who takes £20,000 of dividends pays nothing on the first £500 and 10.75% on the remaining £19,500, a bill of £2,096.25.

Dividends within the allowance need no reporting. Taxable dividends up to £10,000 go on your return if you file one, or HMRC can adjust your tax code; above £10,000 you need a Self Assessment return. See the dividend allowance explained.

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For 2026/27 (6 April 2026 to 5 April 2027), dividends above the £500 dividend allowance are taxed at 10.75% in the basic rate band, 35.75% in the higher rate band and 39.35% in the additional rate band. The basic and higher rates each rose by two percentage points from 2025/26.

Your band depends on total income, including salary. With the standard £12,570 Personal Allowance, the basic rate band covers total income up to £50,270.

A director with a £12,570 salary and £30,000 of dividends has total income of £42,570, all in the basic rate band. After the £500 allowance, £29,500 is taxed at 10.75%, giving £3,171.25 to report on the 2026/27 Self Assessment return, due by 31 January 2028.

The guide to dividend tax rates for 2026/27 covers higher rate examples.

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A director’s loan account is the company’s record of money a director takes out of, or pays into, the company that is not salary, dividends or repaid expenses. Any balance at the year end goes on the balance sheet in the annual accounts. If the director owes the company money at that point, extra Corporation Tax and personal tax can follow.

An overdrawn account means the director owes the company. An account in credit means the company owes the director, for example after the director lent it money, which carries no Corporation Tax for the company.

An overdrawn account matters most when the director is also a shareholder of a close company, which describes most owner-managed companies. If the balance is not repaid within nine months of the year end, the company pays section 455 tax: 35.75% on loans made on or after 6 April 2026, or 33.75% on loans made between 6 April 2022 and 5 April 2026. HMRC refunds that tax, but not interest, once the loan is repaid. Repaying and then borrowing again within 30 days can be caught by anti-avoidance rules.

If a director-shareholder owes more than £10,000 at any time in the tax year, the loan is also treated as a benefit in kind.

Jo borrows £8,000 from her company in June 2026 and still owes it at the 31 March 2027 year end. If she repays by 31 December 2027, no section 455 tax arises. If not, the company owes £2,860 (35.75% of £8,000), due on 1 January 2028 and reported on form CT600A.

See director’s loan accounts and s455 for repayment options. The balance is confirmed when your year-end accounts are prepared.

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A dividend paid without enough distributable profits is unlawful under the Companies Act 2006. A shareholder who knew, or had reasonable grounds to believe, it was unlawful must repay it to the company. Until then, HMRC treats money taken from a close company as a loan, which can lead to a section 455 Corporation Tax charge.

Section 830 of the Act allows dividends only out of profits available for distribution: accumulated realised profits less accumulated realised losses over the company’s life, after Corporation Tax. Cash in the bank is not the test. If the last annual accounts do not show enough, directors can rely on interim accounts that allow a reasonable judgement of current profits.

HMRC expects the repayment rule to apply in most private companies whose directors are also shareholders, because they ought to know the position. The payment is then not taxed as a dividend but is a debt owed to the company. If it is still outstanding nine months after the year end, the company pays section 455 tax at 35.75% (for amounts arising on or after 6 April 2026), refunded once the money is repaid in cash or through the director’s loan account.

A company has £6,000 of distributable profits, but its director-shareholder takes £15,000 of dividends in 2026/27. The extra £9,000 is unlawful and, if still unpaid nine months after the year end, costs the company £3,217.50 in section 455 tax.

The usual fixes are repaying the excess or leaving it as a loan subject to section 455. Treating it as salary means running it through payroll with PAYE and National Insurance.

See what happens with illegal dividends, and how to pay yourself a dividend legally to avoid a repeat.

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Usually not. HMRC does not allow a company with one director to claim Employment Allowance if that director is the only employee liable for employer (secondary Class 1) National Insurance, which in 2026/27 means being paid above the £5,000 secondary threshold. If another employee is also paid above £5,000, the company can usually claim up to £10,500 a year.

Some points catch people out:

• An employee paid £5,000 or less a year creates no employer National Insurance, so they do not make the company eligible.
• A company with two directors both paid above the threshold can normally claim.
• Earnings within the IR35 off-payroll rules, and domestic staff such as a nanny, cannot be included in a claim.
• Only one company in a group of connected companies can claim.

The claim is made through payroll software by answering “Yes” to the Employment Allowance indicator on an Employer Payment Summary (EPS), and must be made again every tax year.

Two directors each paid £12,570 in 2026/27 would normally cost the company £1,135.50 each in employer National Insurance (15% of £7,570), or £2,271 in total. Employment Allowance covers all of it. A one-director company paying the same salary pays the £1,135.50.

The guide to Employment Allowance for single-director companies looks at whether taking on staff changes the numbers. SmartFiling’s payroll service sets the EPS indicator for eligible employers.

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The four main ways to take money out of a limited company are salary, dividends, a director’s loan and employer pension contributions. Most owner-managers combine a modest salary through payroll with dividends paid from profits after Corporation Tax, and use loans or pension contributions for specific needs.

Each route is taxed differently in 2026/27:

• Salary is paid through PAYE and is deductible for Corporation Tax. Many single-director companies pay £12,570, which uses the Personal Allowance with no employee National Insurance, although employer National Insurance of 15% applies above £5,000.
• Dividends come out of profits after Corporation Tax and are not deductible. Above the £500 allowance they are taxed at 10.75%, 35.75% or 39.35%, and they are only lawful if the company has enough distributable profits.
• A director’s loan is money borrowed from the company. If it is still owed nine months after the year end, the company pays section 455 tax at 35.75%, refunded once the loan is repaid.
• Employer pension contributions go straight into a registered pension scheme. They are not taxed as the director’s income, carry no National Insurance and are normally deductible for Corporation Tax in the period paid.

Repaying expenses you covered personally is not income at all, provided they are genuine business costs.

A typical 2026/27 pattern is a £12,570 salary, with employer National Insurance of £1,135.50, and the rest taken as dividends as profits allow.

For the detail, see the four ways to take money out of a limited company and the salary and dividend calculator guide.

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Yes, if your company gave you taxable benefits, such as a company car or private medical insurance, that were not taxed through payroll. By 6 July after the tax year, the company must file a P11D for each director or employee who received them, plus a P11D(b) reporting the Class 1A National Insurance due.

The main deadlines after each tax year are:

• 6 July: submit the P11D forms and the P11D(b), and give each employee a copy of their information.
• 22 July: pay the Class 1A National Insurance electronically (19 July if paying by cheque). The rate for 2026/27 is 15%.

Both forms must be filed online, through HMRC’s PAYE Online service for employers with fewer than 500 employees. HMRC only accepts paper forms from businesses that have stopped trading. A late P11D(b) costs £100 per 50 employees for each month or part month it is late.

Routine costs covered by an exemption, such as reimbursed business travel, do not go on a P11D. If every benefit is payrolled, no P11D is needed, but the P11D(b) still is. A director’s loan of more than £10,000 can also count as a benefit.

A company that pays for private medical insurance with a taxable value of £1,000 in 2026/27, not payrolled, files a P11D and P11D(b) by 6 July 2027 and pays £150 of Class 1A by 22 July 2027. The director pays Income Tax on the £1,000.

From 6 April 2027 payrolling becomes mandatory for company cars, fuel, vans and medical benefits, with most other benefits following from April 2028.

SmartFiling’s payroll service covers year-end employer forms, and the payroll compliance basics guide explains the wider reporting cycle.

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The deadline for filing an online Self Assessment tax return and paying the tax owed is 31 January after the end of the tax year. For the 2025/26 tax year (6 April 2025 to 5 April 2026), that is 31 January 2027. Paper returns must reach HMRC by 31 October 2026.

Other dates for the same tax year:

• 5 October 2026: register if you have not filed before, or did not need to file for 2024/25.
• 30 December 2026: online deadline if you want the bill collected through your PAYE tax code.
• 31 January 2027 and 31 July 2027: payments on account towards your 2026/27 bill, if you make them.

A late return brings an immediate £100 penalty, with daily penalties after three months. Late tax attracts interest plus 5% penalties at 30 days, 6 months and 12 months.

See every Self Assessment date for 2026/27 for the full calendar.

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You need to file a Self Assessment tax return if, in the last tax year, you were a sole trader earning more than £1,000 before expenses, a partner in a business partnership, owed Capital Gains Tax, or had untaxed income above certain limits, such as rental profits over £2,500 or dividends over £10,000. You must also file if HMRC sends you a notice to file.

The most common triggers are:

• Self-employment income over the £1,000 trading allowance, measured before expenses.
• Rental income: above £1,000 you tell HMRC, and you must file a return if it is more than £2,500 after expenses or £10,000 before expenses.
• Dividends over £10,000. Smaller taxable amounts can usually be collected through your tax code.
• The High Income Child Benefit Charge (unless paid through PAYE), foreign income, or Capital Gains Tax to pay.

Being a company director does not by itself mean you must file. The guide to Self Assessment for limited company directors explains when directors do.

If you have not filed before, register by 5 October after the tax year ends. Sam, an employee, started letting a flat in 2025/26 and received £9,600 in rent with £2,100 of expenses. His £7,500 rental profit is over £2,500, so he must register by 5 October 2026 and file online by 31 January 2027.

Check the 12 scenarios that need a Self Assessment return, or use SmartFiling’s Self Assessment tax return service if you would rather not file it yourself.

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Payments on account are two advance payments towards your next Self Assessment bill, due by 31 January and 31 July. Each is normally half of the previous year’s Income Tax and Class 4 National Insurance. You must make them unless last year’s bill was under £1,000, or more than 80% of your tax was already collected at source, for example through PAYE.

Anything still owed after the two payments is a balancing payment, due by the next 31 January. Capital Gains Tax and student loan repayments are not included in payments on account; they are settled in the balancing payment.

The first year catches people out because two amounts fall due together. Priya’s first Self Assessment bill, for 2025/26, is £4,000. By 31 January 2027 she pays:

• £4,000 for 2025/26
• £2,000 as her first payment on account for 2026/27

She pays another £2,000 by 31 July 2027. If her 2026/27 bill turns out to be £5,000, she owes a £1,000 balancing payment plus a £2,500 first payment on account for 2027/28 by 31 January 2028.

If you expect lower profits, you can ask HMRC to reduce your payments on account online or with form SA303. Reduce them too far and HMRC charges late payment interest on the shortfall.

The guide to payments on account explained covers reductions and cash-flow planning, and how to pay Self Assessment tax lists the payment methods.

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You can print your SA302 tax calculation and the matching tax year overview from your HMRC online account once your Self Assessment return has been filed, but not until 72 hours after you submit it. If you or your accountant filed through commercial software, print the tax calculation from that software instead and take the tax year overview from your HMRC online account.

An SA302 shows your total taxable income, allowances and reliefs, and how HMRC worked out the tax for the year. You can get one for each of the last four tax years. Lenders on HMRC’s published list accept SA302s printed by customers, their agents or accountants, and they also need the tax year overview.

A few practical points:

• Check with your lender what evidence of income it needs before you print.
• The software version may be called a “tax computation”. Lenders on HMRC’s list accept it alongside the tax year overview.
• If you filed on paper, HMRC posts the calculation to you.
• Contact HMRC if you cannot get the documents.

If you file your 2025/26 return online on 10 October 2026, the SA302 is available to print from 13 October 2026.

Lenders rely on the figures, so the return itself needs to be accurate and filed on time. SmartFiling’s Self Assessment tax return service prepares and files the return, which gives you a tax calculation to send to your lender.

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Making Tax Digital (MTD) for Income Tax applies if you are a sole trader or landlord registered for Self Assessment and your qualifying income is over the threshold: over £50,000 from 6 April 2026, over £30,000 from 6 April 2027 and over £20,000 from 6 April 2028. Qualifying income is your combined self-employment and property income before expenses.

HMRC decides using your return for the tax year two years before: the 2024/25 return decided who started in April 2026, the 2025/26 return decides April 2027, and the 2026/27 return decides April 2028. HMRC writes to people who are in scope, but you are still responsible for checking if no letter arrives.

These do not count towards qualifying income:

• employment income taxed through PAYE
• your share of partnership profits
• dividends, including those from your own limited company
• the State Pension and private pensions

Partnerships are not yet in MTD for Income Tax, and a limited company’s own profits fall under Corporation Tax instead.

Dan had £22,000 of self-employed turnover and £12,000 of rent in 2025/26, giving qualifying income of £34,000. That is over £30,000, so Dan must use MTD for Income Tax from 6 April 2027.

Once in, you keep digital records, send quarterly updates through compatible software and submit a tax return by 31 January. Some people are exempt, which the guide to MTD exemptions covers.

Check the MTD for Income Tax thresholds for more examples, or see SmartFiling’s MTD for Income Tax service.

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MTD quarterly updates are summaries of your self-employment or property income and expenses that you send to HMRC from compatible software every three months under Making Tax Digital for Income Tax. They are not tax returns. You still submit a tax return for the year by 31 January after it ends.

Your software adds up your digital records into category totals. HMRC does not see individual receipts or invoices, and you do not need to make accounting or tax adjustments before sending an update. You send a separate update for each self-employment and property business, even if nothing happened in the period.

Each update runs from the start of the tax year, so correcting an earlier mistake does not mean resending old updates. If your accounts run to 31 March, you can choose calendar periods ending on the last day of each quarter instead; the deadlines are the same.

For 2026/27, the first update covered 6 April to 5 July 2026 and was due by 7 August 2026. The last is due by 7 May 2027, and the tax return by 31 January 2028.

HMRC is not giving penalty points for late quarterly updates in 2026/27. From 2027/28, each late update earns a point, and 4 points bring a £200 penalty.

See MTD quarterly updates explained for a walk-through, or let SmartFiling’s MTD for Income Tax service send them for you.

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You are exempt from Making Tax Digital for Income Tax if your qualifying income is £20,000 or less, or if HMRC accepts that you are digitally excluded because age, health, disability, location or religious beliefs make using software unreasonable. Some groups are exempt automatically. Anyone exempt still files a normal Self Assessment tax return.

Automatic exemptions, with no application needed, cover:

• people without a National Insurance number before the tax year starts
• trustees filing an SA900, non-resident companies filing an SA700, and personal representatives of someone who has died
• Lloyd’s members, and people whose return shows they are not physically or mentally able to deal with HMRC and have a power of attorney or deputy in place
• ministers of religion and people claiming Married Couple’s Allowance or Blind Person’s Allowance (these groups will be brought in later)

Partnerships are also outside MTD for Income Tax for now.

A second group is exempt only until April 2027: people claiming averaging relief or qualifying care relief, and people filing the SA107 (trust income) or SA109 (residence) pages. HMRC bases automatic exemptions on your 2024/25 return. A foster carer who claimed qualifying care relief on that return does not need MTD for 2026/27, but joins from 6 April 2027 if qualifying income for 2025/26 was over £30,000.

You must apply for a digital exclusion exemption. HMRC will not accept an application based only on having filed on paper before, being unfamiliar with software, having few records, or the extra time or cost involved.

Who doesn’t have to comply with MTD explains how to apply, and the MTD for Income Tax thresholds show when everyone else joins.

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A limited company can be more tax-efficient once profits are high enough to leave some money in the business, but it brings extra filing duties and costs. In 2026/27 a one-person company that pays out all its profit often pays more tax than a sole trader on the same profit, so compare both structures using your own figures.

A sole trader pays Income Tax on business profits plus Class 4 National Insurance of 6% on profits between £12,570 and £50,270 and 2% above, all through Self Assessment.

A limited company pays Corporation Tax of 19% on profits up to £50,000, 25% above £250,000, with Marginal Relief in between. You then pay yourself a salary, which costs employer National Insurance of 15% above £5,000 (Employment Allowance cannot cover it if the director is the only employee paid above that level), and dividends, taxed at 10.75% in the basic rate band after the £500 allowance.

Here is £50,000 of profit in 2026/27, using England, Wales and Northern Ireland rates, with no other income and all profit taken out (company pays a £12,570 salary, the rest as dividends):

The company route costs £1,406.25 more here. It can come out ahead when you leave profits in the company, because personal tax on retained profit is deferred until you draw it.

A company also means more compliance:

• annual accounts at Companies House, due 9 months after the year end
• a CT600 return within 12 months, with Corporation Tax paid 9 months and 1 day after the year end
• an annual confirmation statement (£50 online)
• payroll for your salary

A sole trader files one Self Assessment return, but from 6 April 2026 sole traders with qualifying income over £50,000 must also send Making Tax Digital quarterly updates. Dividends from your own company do not count towards that threshold.

The full sole trader vs limited company comparison runs the numbers at higher profits, and the guide on when to switch to a limited company covers timing.

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You must register for VAT if your VAT-taxable turnover goes over £90,000 in any rolling 12-month period, or if you expect it to go over £90,000 in the next 30 days alone. Under the rolling test, you have 30 days from the end of the month in which you went over to register with HMRC.

Rolling means any 12 consecutive months, not your tax year or financial year, so it is worth checking the total at the end of every month.

Taxable turnover includes standard-rated, reduced-rated and zero-rated sales, but not VAT-exempt or out-of-scope income. A business that sells only exempt goods or services does not have to register.

A business’s taxable turnover for the previous 12 months first goes over £90,000 on 20 October 2026. It must register by 30 November 2026, and its effective date of registration is 1 December 2026. From that date it must account for VAT on its sales.

The 30-day forward test works differently. If you expect taxable turnover in the next 30 days alone to exceed £90,000, for example from one large contract, you must register by the end of that 30-day period, and registration takes effect from the date you realised.

Registering late does not remove the bill. HMRC collects VAT on sales made since the date you should have registered and may add a penalty. If you only went over the threshold temporarily, you can ask HMRC for a registration exception instead.

The rolling 12-month VAT threshold test guide has more examples. Once registered, SmartFiling’s VAT return service handles quarterly filing.

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You register for VAT online with HMRC, signing in to its online service (or creating sign-in details), within 30 days of the end of the month in which your taxable turnover went over £90,000. HMRC then sends your 9-digit VAT registration number and effective date of registration by post, and signs your business up to Making Tax Digital for VAT.

1. Confirm your effective date of registration, as VAT is due on sales from that date.
2. Gather your details. A limited company needs its company registration number, Unique Taxpayer Reference, bank details, turnover for the last 12 months and an estimate for the next 12. Sole traders and partners give their National Insurance number and an identity document such as a passport instead of a company number.
3. Complete the online application. You can save it and return later.
4. When the VAT number arrives, add VAT to your HMRC business tax account to set up your VAT online account.
5. Set up Making Tax Digital compatible software for your VAT returns.

A few cases must use the paper VAT1 form instead, including applying for a registration exception because you went over the threshold only temporarily.

You cannot show VAT on invoices until the number arrives, but you can raise your prices to cover it. A business invoicing £5,000 of standard-rated work while waiting could charge £6,000, then reissue the invoice showing £1,000 of VAT once the number comes through.

An accountant can deal with HMRC for you and submit your VAT returns. The step-by-step VAT registration guide shows each screen, and SmartFiling’s VAT return service picks up from your first return.

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Under Making Tax Digital (MTD) for VAT, you keep digital VAT records and submit each VAT return to HMRC through compatible software, or through bridging software that links a spreadsheet to HMRC. The VAT online account can only be used to file if HMRC has given you an exemption or your VAT registration has been cancelled.

1. Choose software. Use HMRC’s software finder to pick record-keeping software, or bridging software if you keep records in spreadsheets.
2. Connect it to HMRC. The software asks you to grant it authority to access your VAT data, which lasts 18 months.
3. Keep digital records. Record each sale and purchase in software. Where data moves between programs, it must pass through a digital link, such as linked spreadsheet cells. Copying and pasting does not count.
4. Check and submit. Review the figures the software produces and submit the return from it.
5. Pay. The payment must reach HMRC by the same deadline as the return.

Returns and payments are usually due one calendar month and seven days after the period ends. For a quarter ending 30 September 2026, both are due by 7 November 2026.

Sending a paper return when you are not exempt can bring a penalty of up to £400.

An accountant can file through their own software once you authorise them. Each step is covered in more detail in submitting a VAT return under MTD, and SmartFiling’s MTD VAT return service can file for you.

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VAT returns and payments are normally due one calendar month and seven days after the end of each VAT period, so a quarter ending 30 June 2026 is due by 7 August 2026. Each late return earns a penalty point, and a quarterly filer who reaches 4 points pays £200 for that return and each further late one. Late payment brings separate penalties and interest.

Late submission penalties work on points:

• One point for each late return, including nil and repayment returns.
• The threshold is 4 points for quarterly returns, 5 for monthly and 2 for annual.
• Points below the threshold expire after about 24 months. At the threshold, you clear them with 12 months of on-time quarterly returns and no outstanding returns from the previous 24 months.
• A newly registered business’s first return is not covered.

Late payment penalties depend on how late the VAT is:

• Up to 15 days overdue: no penalty.
• 16 to 30 days: 3% of the VAT owed at day 15.
• 31 days or more: 3% at day 15 plus 3% at day 30, then a second penalty charged daily at 10% a year.

Late payment interest, at the Bank of England base rate plus 4%, runs from the first day overdue. Agreeing a Time to Pay arrangement early can reduce or avoid the penalties.

A business owing £8,000 for the quarter to 30 June 2026 pays on 25 August 2026, 18 days late. It gets a £240 first late payment penalty (3% of £8,000) plus interest, but no penalty point if the return was on time.

Appeals and removing points are covered in VAT deadlines and penalty points, and SmartFiling’s MTD VAT return service files returns for you.

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Standard VAT accounting suits most small businesses, because you reclaim the VAT on purchases as you go. The Flat Rate Scheme can save money for some service businesses with low costs, the Cash Accounting Scheme helps when customers pay slowly, and the Annual Accounting Scheme cuts you to one VAT return a year. A business classed as a limited cost trader on the Flat Rate Scheme pays 16.5% and is often worse off.

How the Flat Rate Scheme works

You pay HMRC a fixed percentage of your VAT-inclusive turnover and keep the difference. The percentage depends on your trade, with a 1% discount in your first year of VAT registration. You cannot reclaim VAT on purchases, apart from certain capital assets over £2,000, and you must leave if turnover goes over £230,000 a year including VAT.

The catch is the limited cost trader rule. If you spend less than 2% of your VAT-inclusive turnover, or less than £1,000 a year, on goods, your rate is 16.5% whatever your trade.

Cash and annual accounting

Under cash accounting you pay VAT on sales when customers pay you and reclaim VAT on purchases once you have paid suppliers. You must leave if turnover exceeds £1.6 million, and you cannot combine it with the Flat Rate Scheme, which has its own cash-based method.

Annual accounting replaces four returns with one, due 2 months after your VAT year ends, backed by monthly or quarterly advance payments. It rarely suits a business that usually reclaims VAT, because you get only one refund a year.

Worked example

An IT consultant invoices £60,000 plus £12,000 VAT in a year (VAT-inclusive turnover of £72,000) and pays £1,000 of VAT on costs, mostly services.

• Standard accounting: £12,000 minus £1,000, so £11,000 to HMRC
• Flat Rate Scheme at the 14.5% rate for IT consultancy: £10,440
• Flat Rate Scheme as a limited cost trader at 16.5%: £11,880, which is £880 more than standard accounting

The guide to VAT schemes compared with worked examples adds a building contractor and an agency with slow payers. SmartFiling’s MTD VAT return service includes a VAT scheme review.

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A limited cost trader, which HMRC calls a limited cost business, is a business on the VAT Flat Rate Scheme whose spending on relevant goods, including VAT, is below 2% of its VAT-inclusive turnover or below £1,000 a year. It must use a flat rate of 16.5% instead of the lower percentage set for its trade.

Relevant goods exclude services such as rent and accountancy, capital items such as laptops, food and drink for you or your staff, and vehicle costs unless you work in transport.

The test applies to each VAT return; on a quarterly return the £1,000 becomes £250. A business with £20,000 of quarterly flat rate turnover that spends £325 on relevant goods is above £250 but below 2% (£400), so it pays 16.5%.

That often costs more than standard accounting, as the limited cost business rule example shows.

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You need to run payroll as the only director if your company pays you a salary of £96 a week (about £5,000 a year) or more in 2026/27, gives you expenses or company benefits, or you have had another job in the tax year. If you take only dividends, the company does not need a PAYE scheme. GOV.UK confirms a company must register as an employer even when it pays only its sole director.

Why a salary is usually worth taking

A salary of at least £6,708, the 2026/27 lower earnings limit, earns a qualifying year towards the State Pension even though no employee National Insurance is due below £12,570. A £5,000 salary avoids employer National Insurance but falls short of that qualifying year. The guide to the most tax-efficient director salary explains why £12,570 is recommended for most single-director companies.

What running payroll involves

• register as an employer with HMRC before the first payday
• send a Full Payment Submission on or before every payday
• pay any PAYE owed by the 22nd of the next tax month (19th by post)
• give yourself a P60 by 31 May if you are on the payroll on 5 April

A sole director cannot claim Employment Allowance where they are the only employee paid above the £5,000 secondary threshold. A director without an employment contract usually has no auto-enrolment duties.

A director paid £1,047.50 a month (£12,570 a year) with no other income pays no Income Tax or employee National Insurance. The company pays employer National Insurance at 15% on the £7,570 above £5,000, which is £1,135.50.

Payroll for a single director covers annual PAYE schemes, or a director payroll service can run it for you.

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To set up PAYE for your first employee, register as an employer with HMRC before the first payday, choose payroll software, collect the employee’s P45 or starter checklist, and report each payment on a Full Payment Submission (FPS) on or before payday. You cannot register more than 2 months before you start paying people, and HMRC sends your employer PAYE reference by post.

1. Check the person is an employee with the right to work in the UK, and arrange Employers’ Liability insurance of at least £5 million.
2. Register as an employer; most limited companies with 1 to 9 directors can do this online. If the reference is late, pay the employee anyway and send the FPS once it arrives.
3. Choose payroll software that can send an FPS and an Employer Payment Summary. HMRC’s Basic PAYE Tools is free for employers with fewer than 10 employees.
4. Collect the P45 or starter checklist, National Insurance number, date of birth, address and start date.
5. Give a payslip and send the FPS on or before payday.
6. Pay HMRC by the 22nd of the following tax month (19th by post).

Automatic enrolment duties start on your first employee’s first day. Staff aged 22 to State Pension age earning at least £10,000 a year must be enrolled in a workplace pension.

If the first payday is 30 November 2026, you can register from 30 September 2026. The PAYE for that pay run (tax month 6 November to 5 December) is due by 22 December 2026 if paid electronically.

The guide to setting up PAYE for your first employee covers the 2026/27 figures, or a managed payroll service can run it from the first payday.

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Real Time Information (RTI) is the system employers use to report payroll to HMRC each time they pay staff. The main RTI report is the Full Payment Submission (FPS), which must reach HMRC on or before every payday and shows each employee’s pay and deductions. A second report, the Employer Payment Summary (EPS), is due by the 19th of the following tax month when you need to claim reductions or paid nobody.

Include everyone you pay on the FPS, even people earning less than £96 a week, and enter your usual payday even if you pay early because of a bank holiday. Tax months run from the 6th to the 5th.

You send an Employer Payment Summary to:

• reclaim statutory maternity, paternity or adoption pay
• claim Employment Allowance
• reclaim CIS deductions as a limited company
• tell HMRC you paid no employees in a tax month

Late FPS penalties

HMRC charges a monthly penalty for late reporting, from £100 for 1 to 9 employees up to £400 for 250 or more. There is no penalty if every payment on a late FPS is within 3 days of payday, for your first failure in a tax year (except annual schemes), or for a new employer’s first FPS sent within 30 days of paying someone.

An employer paying staff on Thursday 25 March 2027 must send the FPS by that date. The payment falls in the tax month 6 March to 5 April 2027, so any EPS is due by 19 April 2027 and PAYE is due by 22 April 2027.

See RTI and FPS compliance basics for payslip and year-end rules, or hand the submissions to a payroll service.

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The Construction Industry Scheme (CIS) is an HMRC scheme under which contractors deduct money from payments to subcontractors for construction work and pass it to HMRC as an advance towards the subcontractor’s tax and National Insurance. Contractors must register. Subcontractors do not have to, but if they are not registered, contractors deduct 30% instead of the standard 20%.

Who must register

You must register as a contractor if you pay subcontractors for construction work, or if your business does not do construction but has spent more than £3 million on it in the 12 months since its first such payment. Sole traders, partnerships and limited companies doing construction work for a contractor should register as subcontractors. Some businesses register as both. Employees do not register.

Work CIS covers

CIS covers most construction work on buildings, structures and civil engineering projects, including site preparation, demolition, alterations, repairs, decorating and installing heating, lighting, power, water and ventilation systems. Architecture, surveying, scaffolding hire without labour, carpet fitting, delivering materials and running a site canteen are outside it.

How deductions work

Deductions apply to labour only, not to VAT or materials the subcontractor paid for. On an invoice for £4,000 of labour and £1,000 of materials, a registered subcontractor has £800 deducted, an unregistered one £1,200, and one with gross payment status nothing.

Contractors must verify each new subcontractor with HMRC and file a monthly CIS return by the 19th after each tax month. Subcontractors register online with their UTR; without one, registering for Self Assessment as a subcontractor covers CIS at the same time.

SmartFiling’s guide to what the Construction Industry Scheme is covers deemed contractors and the three deduction rates. Contractors who want the monthly returns handled can use the CIS returns service.

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Sole traders and partners claim back CIS deductions on their Self Assessment tax return, where HMRC sets them against the tax and National Insurance due and repays anything left over. Limited companies use payroll instead. The company enters its year-to-date CIS deductions on its Employer Payment Summary (EPS), HMRC offsets them against the PAYE bill, and any balance left after the tax year ends is claimed as a refund.

Sole traders and partners

On your Self Assessment return, record your total pay before deductions as income and the total taken by contractors as CIS deductions. If tax is still owed, pay it by 31 January after the tax year ends. If you have overpaid, HMRC repays the difference.

Limited companies

• send the Full Payment Submission as usual, with an EPS showing CIS deductions for the year to date
• pay the reduced PAYE balance by the normal date, carrying unused deductions forward within the same tax year
• after the tax year ends, claim any remaining balance online or by post, once all FPS, EPS, CIS returns and Company Tax Returns are filed

Do not claim CIS deductions on the CT600, because GOV.UK warns you may get a penalty. HMRC first uses a refund against any overdue PAYE or Corporation Tax and usually responds within 8 weeks.

A company has £9,000 deducted by contractors in 2025/26 and uses £6,500 against its PAYE bills. From 6 April 2026 it can claim the remaining £2,500, either as cash or towards VAT or an upcoming Corporation Tax bill.

Keep every monthly payment and deduction statement from your contractors, as HMRC may ask for them.

Read how to claim your CIS refund for common causes of delay, or let the CIS returns service handle it.

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To get CIS gross payment status, apply to HMRC online or by post and show that your business passes three tests. It must do construction work in the UK and be run through a bank account, it must have paid tax and National Insurance on time in the past, and its turnover for the last 12 months, ignoring VAT and materials, must meet HMRC’s minimum. Contractors then pay you in full, without deductions.

The turnover test

• sole trader: at least £30,000
• partnership: £30,000 for each partner, or £100,000 for the whole partnership
• limited company: £30,000 for each director, or £100,000 for the whole company
• company controlled by 5 or fewer people: £30,000 for each of them

A company controlled by its two directors needs at least £60,000. If it invoiced £85,000 excluding VAT, including £20,000 of materials, its qualifying turnover is £65,000, which passes.

Applying

The form depends on whether you are a sole trader, partnership or company, and it also registers you for CIS if you are not registered yet. A company needs its UTR, bank details, evidence of turnover such as bank statements and payment and deduction statements, and details of each director and person with significant control.

Keeping it

HMRC reviews gross payment status every year and allows only a small amount of late filing or payment. If HMRC decides to withdraw it, the status ends 90 days after its letter, you have 30 days to appeal, and you must wait a year before reapplying. You then pay all your tax through Self Assessment or Corporation Tax, so set money aside.

The guide on how to get gross payment status explains the 20% and 30% rates too. For help keeping filings on time, see the CIS returns service.

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A limited company must keep accounting records of all money received and spent, its assets, debts owed to and by it, stock at the year end and goods bought and sold, together with the invoices, receipts and bank statements behind them. HMRC requires these records to be kept for at least 6 years from the end of the last company financial year they relate to, and longer in some cases.

When to keep records for longer

• a transaction covers more than one accounting period
• the company bought something expected to last more than 6 years, such as machinery
• the Company Tax Return was filed late
• HMRC has started a compliance check into a Company Tax Return

Records about the company itself

The company must also keep details of shareholders, votes and resolutions, share purchases, debentures, indemnities, and loans or mortgages secured on its assets.

Other retention periods

Records for an accounting period ending 31 March 2026 should be kept until at least 31 March 2032.

Not keeping accounting records can lead to a £3,000 fine from HMRC or disqualification as a director. If records are lost or destroyed, recreate them as best you can, tell your Corporation Tax office and mention it in the Company Tax Return.

The guide on what records to keep and for how long covers sole traders and employers too. A monthly bookkeeping service keeps these records in cloud software as you go.

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To catch up on bookkeeping, gather bank statements, sales invoices and receipts for the missing period, then start at the earliest unreconciled month and work forwards, reconciling each month to the bank before moving on. Keep filing anything that falls due while you catch up, and deal first with whichever overdue filing is building up the largest penalty.

A sequence that works

1. List what is overdue, such as Companies House accounts, the CT600, VAT returns or Self Assessment, and the penalty each one is building.
2. Gather bank statements for every business account (CSV downloads save time), credit card statements, sales and purchase invoices, payroll records, loan agreements and last year’s accounts for opening balances.
3. Import the bank data into your accounting software and reconcile one month at a time, in order.
4. Put anything you cannot identify on a single list instead of stopping. Later months often explain earlier entries.
5. Make the year-end adjustments, then file in deadline order.

Working forwards matters because each month’s closing balances feed the next.

Companies House and HMRC penalties

Companies House penalties for a private company are automatic and rise from £150 to £1,500 depending on how late the accounts are. HMRC charges £200 once a CT600 due on or after 1 April 2026 is a day late. Accounts for a year ending 30 November 2025 were due by 31 August 2026. Filed on 20 October 2026, they are between 1 and 3 months late, so the penalty is £375.

The guide on how to catch up a year of bookkeeping includes typical catch-up costs. If you would rather hand the backlog over, a bookkeeping catch-up service can rebuild the records from your bank data.

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Yes, if your business is VAT-registered or you are a sole trader or landlord within Making Tax Digital (MTD) for Income Tax. You must keep the required records in compatible software, or in spreadsheets connected to HMRC by bridging software, and send returns or quarterly updates from that software. A limited company that is not VAT-registered has no MTD record-keeping duty, though it must still keep accounting records.

MTD for VAT

All VAT-registered businesses must follow MTD for VAT unless exempt. Digital records include the VAT on sales and purchases, the time and value of each supply, and adjustments. Data moving between products must use a digital link, such as linked spreadsheet cells or a CSV import, never copy and paste.

MTD for Income Tax

MTD for Income Tax applies to sole traders and landlords whose qualifying income, meaning self-employment and property turnover combined, is over £50,000 from 6 April 2026, over £30,000 from 6 April 2027 and over £20,000 from 6 April 2028. You keep digital records of that income and your expenses, send quarterly updates by 7 August, 7 November, 7 February and 7 May, and finalise the year by 31 January.

A sole trader with £34,000 of turnover in 2025/26 must use MTD for Income Tax from 6 April 2027, so digital records need to start from that date.

Other income, such as dividends, needs no digital records but still goes on the return. Digitally excluded people can apply for an exemption, and HMRC has said it will not introduce MTD for Corporation Tax.

See what HMRC requires for digital records in more detail. SmartFiling’s bookkeeping service keeps records in Xero, QuickBooks or FreeAgent.

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Most micro-entity accounts are filed within 7 working days of receiving your records.

Yes. We file VAT returns under Making Tax Digital and are already filing under MTD for Income Tax, which has applied since 6 April 2026 to qualifying income over £50,000.

Yes — RTI payroll from £15 per employee per month, including auto-enrolment, payslips, P60s and year-end returns.

Xero, QuickBooks and FreeAgent. We can migrate you from a spreadsheet if needed.

We can still help — late filings attract automatic penalties from Companies House, but we will minimise additional costs and file quickly.

Yes. SmartFiling is the trading brand of Ballards Newman (Finchley) Limited, an ICAEW-regulated, London-based UK Chartered Accountants practice with roots in the 1970s.

No. Fill the Get a Quote form and we will reply within one working day with a fixed price.

Yes. SmartFiling’s micro-entity accounts and CT600 filing service prepares your FRS 105 accounts, files them with Companies House, and prepares and submits your CT600 Corporation Tax return to HMRC, with iXBRL tagging included, for one fixed fee, from £299 for companies with turnover under £40,000. An ICAEW Chartered Accountant reviews and signs off every filing.

The published turnaround is 7 working days from receiving complete records, and SmartFiling confirms whether your company qualifies as a micro-entity before you pay. Your company still pays any Corporation Tax directly to HMRC; SmartFiling tells you the amount and the deadline.

If your accounts are prepared elsewhere, the separate Corporation Tax filing service covers the CT600 on its own, priced by fixed quote.

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