Corporation Tax, Income Taxes, and Capital Gains Tax at the United Essay

Corporation Tax, Income Taxes, and Capital Gains Tax at the United Kingdom - Essay Example A limited amount of companies must pay corporation tax. The self-employed do not. However, in almost all circumstances, cooperatives, housing associations, members' clubs, and trade associations must pay corporation tax (Wikipedia, 2007). Companies that are obligated to pay corporation taxes on their profits are required to perform certain activities. First of all, they are required to notify HM Revenue and Customs that they indeed are in operation at that they are among those required to pay corporate taxes. Then, the company must file a self-assessment Company Tax Return without being assessed by the HMRC, similar to individuals who are required to file their own income taxes without first being assessed by the IRS. Lastly, this requires that accurate records of all financial dealings that contribute to the information submitted to the HMRC be kept at all times. In order for corporations that must pay corporation tax to avoid fines, they must know their statutory filing date and their normal due date. Each company must hold full responsibility for calculating its own corporation taxes and paying the amount due before the deadline. If a company fails to do so, they will owe a penalty. According to Business Link, "A company can send in its Company Tax Return at any time after the end of its accounting period but must do so no later than the statutory filing date. This is later of (a) 12 months after the end of your company's accounting period [or] (b) three months after your company receives a "notice to deliver a Company Tax Return form CT600" from HM Revenue & Customs (HMRC)" (2007). Companies who do not send their returns on time receive penalties. Companies who regularly submit their returns late enjoy increasingly higher penalties. Penalties can also be assessed for returns that are incorrect or for companies who fail to tell HMRC that they are liable to pay corporate taxes. Business Link claims that "Payment of the corporation tax itself is due exactly nine months and one day after what is called your normal due date. For most companies, the normal due date is the last day of the accounting period. So if a company's tax return covers the accounting period 1 January 2004 to 31 December 2004, then the corporation tax should be paid no later than 1 October 2005" (2007).