Question 1

Who needs to file a CT600 Corporation Tax Return?

Accepted Answer

A company must file a CT600 for any period in which HMRC has issued a notice to deliver a return, which normally applies once the company is active. The return is due within 12 months of the end of the accounting period, and corporation tax is payable 9 months and 1 day after the period end. A company that HMRC has accepted as dormant generally does not need to file a return while it remains dormant, unless HMRC issues a further notice requiring one. We confirm what is required for your company before anything is due.

Question 2

What is the UK Corporation Tax rate?

Accepted Answer

From 1 April 2023, the main UK Corporation Tax rate is 25% for companies with profits above £250,000. A small profits rate of 19% applies to profits below £50,000, with marginal relief between £50,000 and £250,000. These thresholds are reduced where a company has associated companies, and are also proportionately reduced for accounting periods of less than 12 months. The small profits rate and marginal relief are generally available only to UK-resident companies; a non-resident company letting UK property normally pays the 25% main rate regardless of the size of its profit.

Question 3

Does my UK company need to register for VAT?

Accepted Answer

You must register for VAT when your taxable turnover exceeds the VAT registration threshold, which is currently £90,000 over any 12-month period. You may also register voluntarily below this threshold if it is commercially beneficial (e.g., to reclaim input VAT on purchases). Registration is also required immediately if you expect to exceed the threshold in the next 30 days.

Question 4

What is Making Tax Digital for VAT?

Accepted Answer

All VAT-registered businesses must maintain digital records and submit VAT returns using HMRC-compatible software under Making Tax Digital (MTD) for VAT, regardless of their level of turnover. Paper-based VAT returns are no longer accepted. Expat UK Tax can manage MTD-compliant VAT compliance on your behalf.

Question 5

Can a non-UK-resident be a director of a UK company?

Accepted Answer

Yes. A non-UK-resident individual can be a director of a UK limited company. However, this creates specific tax considerations: the director may need to file a UK Self Assessment return, and the company may still owe UK PAYE on director's remuneration. The company's own UK tax residence also needs care. A company incorporated in the UK is UK tax resident, and a company incorporated overseas can still be UK resident if its central management and control is exercised in the UK, subject to the tie-breaker in any applicable double tax treaty. We advise non-UK-resident directors on all of these issues.

Question 6

What is a director's loan account, and are there tax implications?

Accepted Answer

A director's loan account (DLA) records amounts owed between a director and their company. If the DLA is overdrawn (the company owes money to the director, or more commonly, the director owes money to the company), there are tax implications. Companies must pay Section 455 tax at 33.75% on outstanding loans above £10,000 nine months and one day after the accounting period end. If the loan is repaid, the S455 tax is refunded.

Main rate	25% (profits above £250,000)
Small profits rate	19% (profits up to £50,000)
Marginal relief	Between £50,000 and £250,000

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