If you don't file your return, HM Revenue and Customs (HMRC) will estimate how much Corporation Tax to pay. This is called 'determination'.
If your company or organisation is liable for Corporation Tax, you must file a Company Tax Return and pay your Corporation Tax on time.
If you’ve received a ‘Notice to deliver a Company Tax Return’ from HM Revenue and Customs (HMRC) and you file late or not at all, your company or organisation will be charged a penalty. HMRC may also tell you how much Corporation Tax to pay by estimating what you owe. This is called making a determination (or revenue determination).
The determination takes the place of the amount of tax you would have calculated had you filed a Company Tax Return.
When HMRC can issue a determination
HMRC can issue a determination if your company or organisation has not filed a Company Tax Return by your filing deadline (known to HMRC as your ‘filing date’). Your filing deadline is normally 12 months after the end of your company or organisation’s Corporation Tax accounting period. In practice HMRC will normally only issue a determination at least six months after your company or organisation’s filing deadline if they’ve still not received your return. There are other circumstances when HMRC may issue a determination to your company or organisation.
How HMRC calculates a determination
HMRC makes a ‘best estimate’ of the amount of Corporation Tax you need to pay based on known facts about your company or organisation, to the best of their information and belief.
This estimate is based on, for example:
- your company’s profits
- items such as losses carried forward from earlier accounting periods
- the rate or rates of Corporation Tax HMRC thinks your company should pay
The full amount of Corporation Tax shown on the determination must be paid immediately.Your normal Corporation Tax payment deadline can vary depending on how much taxable profit your company or organisation makes.HMRC will charge your company or organisation interest on the tax back to your normal due date for payment - normally nine months after the end of your Corporation Tax accounting period.
What happens if you don’t pay on time
HMRC will pursue collection of the unpaid tax. They will do this until it’s paid or you file your outstanding Company Tax Return and replace the determination with your ‘self-assessment’.
What to do if you don’t agree with a determination
You can’t appeal against the amount of the determination of how much Corporation Tax you must pay.
You can however replace it (or ‘displace’ it) by filing your outstanding Company Tax Return and paying the amount of Corporation Tax you have calculated in that return.
You should do this as soon as possible.