Tax returns: your accountant files, you are responsible

Key takeaways

Directors keep responsibility for the company's tax returns even when an accountant prepares and files them. HMRC treats the company as responsible for what it submits and charges penalties for late or careless returns. Outsource the preparation, but read and approve each return, provide complete records on time and keep the deadlines in your own diary.

• The company answers to HMRC, not the accountant.
• Approve every return before it is filed.
• Corporation Tax is due 9 months and 1 day after the year end.
• Keep the filing deadlines in your own diary.

Who is responsible if the accountant makes a mistake?

The company remains responsible to HMRC for the tax and any penalties. Taking reasonable care, such as giving the accountant complete records and checking the return, can reduce penalties for errors. You may have a claim against the accountant under your engagement terms, but that is a separate matter from what HMRC charges.

• Which business processes should you never outsource?
• You can outsource the work, never the accountability

What should directors check before approving?

You do not need to be a tax expert to ask sensible questions.

• Do turnover and profit match the management accounts?
• Are large or unusual items explained?
• Are reliefs and allowances claimed ones you recognise?
• Is the tax due in line with what you expected?

• Management accounts: outsource the pack, keep the review
• Year-end preparation: get records ready for your accountant

Which deadlines should you track yourself?

For a private limited company: annual accounts to Companies House 9 months after the year end, Corporation Tax payment 9 months and 1 day after, the Company Tax Return 12 months after, and VAT returns one month and seven days after each period. Late filing penalties apply automatically.

• Companies House filings: your accountant files, you answer
• VAT return preparation: outsource the routine, own the return

What can be outsourced safely?

Bookkeeping, reconciliations, year-end preparation, return preparation and filing. These are where an accountant or outsourced finance team adds real value. The approval, the completeness of records and the decision on tax planning choices stay with the directors.

• Keep the decision, outsource the admin around it

What does this look like in practice?

A pattern we see: records arrive at the accountant in a rush near the deadline, mistakes slip in and nobody checks the return. Monthly bookkeeping by an outsourced team and a 30-minute director review before filing remove most of that risk.

• See client work
• BPO Solutions for UK businesses

Tax responsibility checklist

• Put all filing and payment deadlines in your diary.
• Keep records complete and up to date monthly.
• Review each return against the accounts.
• Ask about anything you do not recognise.
• Approve the return in writing before filing.

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• Payroll: outsource the run, keep the sign-off

Next step

Find your company's next four tax and filing deadlines and put them in your own diary, with a reminder a month before each.