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With over 20 years of experience supporting small and medium-sized businesses across the United Kingdom, we have seen how minor Corporation Tax mistakes can snowball into costly complications. The good news is that most errors are completely avoidable with the right preparation and support from a qualified Corporation Tax accountant.
 

In this guide, we break down the most common Corporation Tax mistakes small businesses make—and how to avoid them. Whether you handle your company taxes internally or use professional Corporation Tax return services, understanding these pitfalls can save you time, money, and unnecessary stress.  

👉 Need a full walkthrough of CT600 filing, tax bands, and HMRC deadlines? Read: A Complete Guide to Corporation Tax Return Filing in the UK (2025 Update) 

 

1. Waiting Too Long to Prepare or File 

Delaying on Corporation Tax filing is one of the most common and expensive mistakes. Business owners often find themselves scrambling near the deadline, only to realise that important financial data or documentation is missing.
 

Why it matters: Late CT600 filing and delayed payment trigger automatic penalties from HMRC. It can also disrupt cash flow if tax funds have not been earmarked.
 

What to do: Start preparing early—even before your final accounts are complete. Begin reviewing your figures and organising records well in advance. A trusted Corporation Tax accountant can ensure your return is submitted correctly and on time.

 

2. Assuming 'No Profit' Means No Return Is Required 

It is a widespread myth that if your business has not made a profit, you do not need to file a Corporation Tax return. 

In reality: Unless HMRC has officially notified you that your company is dormant, you are legally required to submit a CT600 return each year, even if there is no trading income. 

How to stay compliant: File a nil return with supporting documentation. Our Corporation Tax services include full support with dormant or nil returns to keep your business compliant and avoid HMRC queries. 

 

3. Claiming the Wrong Business Expenses 

Claiming incorrect or ineligible expenses is a frequent source of Corporation Tax errors. Some businesses overclaim personal-use items, while others fail to take advantage of allowable deductions.
 

Common mistakes include:

• Mixing personal and business usage (e.g. mobile phones, vehicle costs)
   
• Forgetting home office expenses
   
• Overlooking software subscriptions or training costs 

Tip: An experienced tax advisor will help you identify all legitimate expenses while ensuring full compliance with HMRC rules—ultimately reducing your tax liability without raising red flags.

 

4. Using Incomplete or Inaccurate Financial Data

Estimating figures or relying on outdated spreadsheets often leads to inconsistencies in the CT600 filing. Even small discrepancies can result in HMRC investigations or incorrect tax payments.

Consequences: Filing inaccuracies can lead to penalties, interest charges, or missed reliefs and allowances.

What to do: Use digital accounting tools such as Xero or QuickBooks for day-to-day bookkeeping, but always consult an accountant to prepare and review your CT600 Corporation Tax return. 

 

5. Failing to Register for Corporation Tax Promptly

New business owners sometimes assume they only need to register for Corporation Tax after turning a profit or completing their first year. This is a costly mistake.

Correct approach: Registration with HMRC is required within three months from the start of your business activities, regardless of whether you've made your first sale.

Best practice: Speak to a tax advisor as soon as your business starts incurring costs or trading. Timely registration is essential for staying compliant from day one. 

 

6. Keeping Poor or Incomplete Financial Records

Failure to maintain clear financial records can create difficulties during CT600 preparation and increase the risk of HMRC scrutiny.

Legal requirement: UK businesses must retain accurate financial records, including invoices, bank statements, and receipts, for at least six years.

How to stay organised: Use cloud storage tools to organise your documents. Better yet, outsource your bookkeeping to a provider offering Corporation Tax return services, so your financial data remains accurate and audit-ready. 

 

7. Relying Only on Tax Software Without Expert Oversight

Tax software such as FreeAgent or Sage can assist with day-to-day accounting but cannot replace professional judgment when it comes to your Corporation Tax return.

Risks of a DIY approach:

• Missed allowances and tax reliefs
   
• Incorrect treatment of depreciation or capital allowances
   
• Filing outdated or incomplete CT600 forms
   

Recommendation: Have your CT600 filing reviewed and submitted by an experienced accountant who understands HMRC regulations and tax planning opportunities.

 

Avoid Mistakes and Maximise Reliefs 

Corporation Tax mistakes are often preventable—but costly if ignored. Working with a qualified advisor ensures your CT600 is filed accurately, your deductions are optimised, and your business remains fully compliant.

By partnering with professionals who understand HMRC requirements, small businesses can focus on growth while we handle the technicalities.

 

Ready to Get Corporation Tax Right the First Time?

Whether you are filing for the first time or correcting past mistakes, our expert team is here to help.📞 Call: 020-8239-4999 Or 📧 dhruv@doshiaccountants.co.uk.

👉 Also read: A Complete Guide to Corporation Tax Return Filing in the UK (2025 Update)