A corporate tax return is prepared backwards from the way it is read. The finished form reports a tax figure, but the work that produces it starts from the accounts and moves through a sequence of adjustments, each of which has to be supportable on its own. Preparing it in that order is what makes it defensible.
The preparation sequence
Start from the profit before tax in the finalised accounts. Add back what tax disallows, principally depreciation, amortisation, entertaining and general provisions. Deduct capital allowances, computed pool by pool. Bring in property income, non-trading loan relationship credits and chargeable gains. Apply reliefs: losses, group relief, R&D. Then apply the rate, check the thresholds against the associated companies count, and deduct marginal relief where the profit falls between them.
The figures that must agree
Turnover and profit before tax in the computation must agree with the accounts, and HMRC's software checks it. The capital allowances brought forward must agree with last year's carried forward. The loans to participators figure on CT600A must agree with the director's loan account in the accounts. Most enquiry correspondence starts with one of these not agreeing, which is usually a bookkeeping problem rather than a tax one.
Amendments
A company may amend its return within twelve months of the filing deadline, which in practice is two years from the end of the accounting period. That window is also the ordinary limit for making or increasing a capital allowances claim, which is why a reliefs review is worth doing before it closes. After it, HMRC's error or mistake relief and the pooling of previously unclaimed expenditure are the remaining routes, and both are narrower.
Questions people ask about corporate tax return
How do I prepare a corporate tax return?
Start from the accounts profit, add back disallowables such as depreciation and entertaining, deduct capital allowances, add other income and gains, apply reliefs, then apply the rate with the thresholds adjusted for associated companies.
How long do I have to amend a corporate tax return?
Twelve months from the filing deadline, which is two years from the end of the accounting period. That is also the ordinary window for making or increasing a capital allowances claim.
What triggers an HMRC query?
Most often a figure that does not agree: turnover against the accounts, capital allowances against last year's carried forward, or the loans to participators figure against the director's loan account.