Common CT600 Mistakes That Trigger an HMRC Enquiry
A CT600 error doesn’t just risk getting your tax wrong u2014 certain mistakes are exactly the kind of thing that flags a return for closer HMRC attention. This guide from Filing Accounts UK covers the errors that come up again and again, and why each one matters, based on common patterns in Corporation Tax compliance work.
At Filing Accounts, we prepare CT600 returns carefully to avoid exactly these issues. If HMRC has already opened an enquiry, see our detailed guide on what happens during an HMRC enquiry.
Getting the Accounting Period Wrong
Your CT600 must cover exactly the right period u2014 matching your company’s actual accounting reference period, not an approximation of it. Errors here are especially common around a company’s first year, when the accounting period can run longer than 12 months and needs splitting into separate returns, or around a change of year end. Getting the dates wrong can misalign your entire tax computation, even if every figure within it is otherwise correct.
Missing or Miscalculating Marginal Relief
Companies with profits between £50,000 and £250,000 are entitled to marginal relief, tapering the rate between 19% and 25%. Two common errors here: forgetting to apply it at all (overpaying tax), or applying it without correctly accounting for associated companies, which split the £50,000 and £250,000 thresholds between them. A director running two or more companies under common control who doesn’t adjust for this will calculate the wrong effective rate.
Treating Director’s Loan Account Errors Incorrectly
An overdrawn director’s loan account still outstanding nine months after the year end triggers an S455 charge, reported on the CT600A supplementary pages. This is one of the most frequently missed supplementary sections u2014 directors sometimes complete the main CT600 correctly but forget the CT600A entirely, or fail to reclaim the charge later once the loan is actually repaid.
Inconsistencies Between the CT600 and the Accounts
Your CT600 figures and your statutory accounts need to tell a consistent story u2014 both are submitted in iXBRL format, and HMRC’s systems can flag discrepancies between the two automatically. A profit figure on your CT600 that doesn’t reconcile with your filed accounts is a red flag that invites further questions, even where the underlying difference has an innocent explanation.
Claiming Reliefs Without Proper Evidence
R&D relief, capital allowances, and loss relief all require the underlying claim to be genuinely supportable if HMRC asks questions. Claiming a relief without the paperwork to back it up u2014 project records for R&D, invoices for capital purchases, computations for carried-forward losses u2014 is a common trigger for a more detailed aspect enquiry into that specific item.
Round, Suspiciously Tidy Figures
Genuine business figures are rarely perfectly round. A return showing neat, rounded expense categories across the board u2014 rather than figures that reflect real invoices and transactions u2014 can look like an estimate rather than an accurate return, particularly if it repeats the same pattern year after year.
Filing Late, Then Compounding the Problem
A single late CT600 triggers an automatic penalty. A pattern of persistent late filing signals to HMRC that a company’s overall compliance may be weaker, which can influence how closely future returns are looked at, separate from any single return being wrong.
How to Reduce Your Risk
- Double-check your accounting period dates match exactly, especially in your first year or after a year-end change
- Reconcile your CT600 figures against your filed accounts before submitting
- Keep supporting evidence for every relief or allowance claimed, not just the figures themselves
- Complete every relevant supplementary page u2014 CT600A for director’s loans, and others where they apply
- File on time, every time, rather than building a pattern of late submissions
Frequently Asked Questions
Can a CT600 mistake trigger an HMRC enquiry?
Yes. Inconsistencies with your accounts, missing supplementary pages, or unsupported relief claims are all common enquiry triggers.
What’s the most commonly missed supplementary page?
CT600A, covering director’s loan account S455 charges, is frequently overlooked even when the main return is otherwise correct.
Does marginal relief get calculated automatically?
Most accounting software calculates it correctly, but errors creep in when associated companies aren’t properly accounted for in the thresholds.
What should I do if I’ve already made a mistake on a filed CT600?
You can generally amend it within 12 months of the original filing deadline u2014 see our full CT600 guide for the detail.
Get Your CT600 Right the First Time
At Filing Accounts, we prepare CT600 returns that reconcile properly with your accounts, include every relevant supplementary page, and are backed by the right evidence u2014 reducing your risk of an HMRC enquiry in the first place.
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