Common CT600 mistakes when you file it yourself

In short: Common Company Tax Return (CT600) mistakes include missing or unbalanced last-year figures, deducting dividends, depreciation or client entertaining, ignoring associated companies or a director's loan, filing one return for a period over 12 months, and paying by the 12-month filing deadline instead of within 9 months and 1 day (GOV.UK: Company Tax Returns: Overview).

Filing it yourself? First, take the 30-second check to see whether Taxley fits your company, then work out both dates with the Corporation Tax deadline calculator.

What are the most common CT600 mistakes in 2026?

The nine mistakes below are the ones to check first when you file without an accountant. Two involve last year's figures, five change the tax bill, and two get a return rejected or a penalty charged. Each row links to a Taxley guide for that part of the return, to read alongside HMRC's CT600 guide.

How often do last year's figures stop a self-filed return?

Often, in Taxley's own data. When Taxley reviewed 50 unfinished, unpaid returns on 24 September 2026, 24 had no prior-year profit and loss figures, 16 had no prior-year balance sheet, and 13 had a prior-year balance sheet that didn't balance. It is a small sample of Taxley's own drafts, not an HMRC statistic.

In Taxley's review, the 13 unbalanced prior-year balance sheets showed three repeat data-entry slips. A deficit was typed as a positive reserve, so the gap came to exactly twice that reserve. Share capital was typed as a reserve, and the asset for shares never paid for, "called-up share capital not paid", was left out. Other returns simply missed lines, such as a creditor due after more than one year. Directors must not approve accounts unless they are satisfied the accounts give a true and fair view of the company's assets, liabilities and financial position (Companies Act 2006 s393). So copy every line from last year's signed accounts rather than typing a figure that forces the totals to agree.

Mistake 1: leaving out last year's figures

Small company accounts must show, for every item in the balance sheet and profit and loss account, the corresponding amount for the previous financial year (SI 2008/409 Sch 1 para 7). A return without last year's figures therefore sends HMRC incomplete accounts. To spot the gap, look for an empty "last year" column anywhere except in the company's first accounts. To fix it, copy each figure from last year's signed accounts. Small companies and micro-entities can choose not to send the profit and loss account to Companies House (GOV.UK: Micro-entity, small and dormant company accounts), so the public record may lack those figures and you'll need the company's own copy. The comparatives guide shows where each figure comes from.

Mistake 2: a balance sheet that doesn't balance

Net assets must equal total capital and reserves, to the penny, in both years' columns. A balance sheet shows everything the company owns, owes and is owed on the last day of the financial year (GOV.UK: Prepare annual accounts for a private limited company), so a gap means a line is missing, duplicated or has the wrong sign. To spot the cause, size the gap: exactly twice one figure usually means that figure's sign is wrong, and £1 may be a share never paid for. To fix it, check that profits brought forward equal last year's closing reserve, that a deficit is negative and that share capital appears once, and never add a balancing figure. The balance sheet guide works through each cause.

Which mistakes change the Corporation Tax bill?

Five mistakes change the tax itself: deducting dividends; deducting depreciation or client entertaining; ignoring associated companies; leaving an overdrawn director's loan off the CT600A; and using losses without stating the deductions allowance. The first four usually understate the tax, risking a careless-error penalty of up to 30% of the extra tax (FA 2007 Sch 24); the last makes the company overpay.

Mistake 3: treating dividends as an expense

Dividends are paid out of profits, so they never reduce Corporation Tax. GOV.UK says you cannot count dividends as business costs when you work out Corporation Tax, and that dividends must not exceed available profits from current and previous financial years (GOV.UK: Taking money out of a limited company). The mistake can start when a transfer to a director is posted to an expense account such as "drawings". To spot it, check whether profit before tax falls by the same amount as the dividend vouchers issued. To fix it, move dividends out of the profit and loss account into the retained earnings movement. The dividends guide separates dividends from salary, expense claims and loan movements.

Mistake 4: deducting depreciation or client entertaining

Two costs found in many small company accounts are not deductible for tax and must be added back in the computation. HMRC's capital v revenue toolkit says depreciation of capital items is generally not allowable and should be added back even where capital allowances have not been claimed (HMRC toolkit); relief for equipment and vehicles comes from capital allowances instead. HMRC's manual says business entertainment is not allowable, with certain exceptions, even when it is a genuine expense of the trade (BIM45000), although staff-only entertaining can be. To spot either, compare the add-backs with the depreciation, entertaining and gifts lines. To fix them, add each back once and claim capital allowances on assets bought. See the capital allowances, client entertaining and tax adjustments guides.

Mistake 5: ignoring associated companies

Associated companies share the Corporation Tax thresholds. Taxable profits below £50,000 pay the 19% small profits rate and profits above £250,000 the 25% main rate, with marginal relief between, and the limits are divided by the number of associated companies plus one: a company with 3 others divides them by 4 (GOV.UK: Marginal Relief for Corporation Tax). A company is associated with another when one controls the other or both are controlled by the same person or persons (CTA 2010 s18E). To spot the mistake, list every company you control, alone or with others, at any time in the period, leaving out any that carried on no trade or business in it. To fix it, enter the count so the limits are divided before the rate is applied. The associated companies guide explains the control tests.

Mistake 6: leaving an overdrawn director's loan off the CT600A

An overdrawn director's loan at the year end can mean extra tax. If a director who is a shareholder in a close company, or is connected to a shareholder, still owes the company money at the end of the period and doesn't repay it within 9 months, the company pays tax on the amount outstanding and shows the amount owed on form CT600A (GOV.UK: Director's loans: If you owe your company money). The rate is 33.75% on loans made from 6 April 2022 to 5 April 2026 and 35.75% on loans made on or after 6 April 2026 (HMRC CTM61505). To spot the mistake, look for a director's loan account in debit. To fix it, complete the CT600A; the tax can be reclaimed once the loan is repaid. The CT600A guide goes box by box.

Mistake 7: using losses without stating the deductions allowance

A company that sets carried-forward losses against its profits must state its deductions allowance in the return; HMRC says that otherwise only 50% of its profits can be relieved by those losses (CTM05230). A company not in a group has an allowance of £5,000,000 for a 12-month period, proportionally reduced for a shorter one (CTA 2010 s269ZW). For example, a company with £40,000 of trading profits and £60,000 of trading losses brought forward could use only £20,000 of those losses without the statement, leaving £20,000 taxed at 19%: £3,800. To spot it, look for losses used in box 160 or 285 with no allowance figure in the computation, and fix it by stating the allowance. The losses guide covers both boxes.

Why does HMRC reject a CT600 or charge a penalty?

HMRC's systems reject a return whose tick boxes break its validation rules, and accounts sent as a PDF instead of iXBRL are unacceptable for most companies. Dates cause the penalties: a return due on or after 1 April 2026 and filed one day late costs £200, and late-paid tax attracts interest even when the return is on time (GOV.UK: Company Tax Returns: Penalties for late filing).

Mistake 8: getting the period or the payment date wrong

A Corporation Tax accounting period can't be longer than 12 months, so first accounts covering, say, 15 months need two returns, each with its own payment deadline (GOV.UK: Your limited company's first accounts and Company Tax Return). The other date mistake is paying by the filing deadline. Corporation Tax is due 9 months and 1 day after the accounting period ends, the return 12 months after it, and HMRC may charge interest if you don't pay on time (GOV.UK: Pay your Corporation Tax bill: Overview). To spot either, compare the dates of the accounts with the tax periods, and diary each payment date separately from the filing date. To fix a long period, file a return for each part. The two-returns guide, the payment guide and the deadline calculator set out the dates.

Mistake 9: sending a PDF or ticking boxes HMRC rejects

For most companies, accounts and computations filed with an online Company Tax Return must be in iXBRL, a tagged format: HMRC's XBRL guide says it is unacceptable to send either as a PDF attachment (GOV.UK: Businesses XBRL guide). Tick boxes cause other rejections. Box 65 is for a company that needs to disclose avoidance schemes (HMRC's CT600 guide), and HMRC's validation rules reject it on a new return without the CT600J page listing each scheme's reference number. The same rules reject boxes 70 and 75, the transfer-pricing boxes, ticked together. To spot trouble, question every tick in boxes 38 to 75. To fix it, file tagged accounts and untick anything that doesn't apply. See the iXBRL guide and the boxes 38 to 75 guide.

How do you correct a CT600 mistake after filing?

You can usually amend a Company Tax Return within 12 months of the filing deadline, using commercial software or by writing to HMRC (GOV.UK: Company Tax Returns: Making changes). After that, you may still be able to claim back overpaid Corporation Tax, and HMRC says to report underpaid tax through its online disclosure service as soon as possible.

A 12-month period ending 31 March 2025, for example, had a filing deadline of 31 March 2026, so its return can usually be amended until 31 March 2027. Telling HMRC about a careless error before it asks matters: HMRC's factsheet gives a penalty range of 0% to 30% for an unprompted disclosure, against 15% to 30% once prompted, and no penalty if you took reasonable care (HMRC CC/FS7a). Underpaid tax found after the amendment window goes through the online disclosure service, which an officer of the company can use. If the accounts are wrong too, correct them as well. In Taxley, a return it filed and HMRC accepted can be amended from its filing page for the standard fee. If that period's accounts aren't at Companies House yet, Taxley can file the amended accounts there from the same page; it doesn't file revised accounts for a period Companies House already has, so correct those there yourself. The correction guide lists the checks to make before you amend.

Which of these mistakes does Taxley catch before you pay?

Taxley won't take payment while its readiness checks show a balance sheet that doesn't balance in either year, missing last-year figures, an unanswered director's loan question, iXBRL documents that fail the format check, or ticks in boxes 65, 70 and 75 that HMRC's rules reject. Tax judgements, such as spotting client entertaining in your costs, still depend on the figures you enter.

Several Taxley checks target the mistakes in this guide directly. When last year's balance sheet doesn't balance, Taxley's editor shows the difference as you type, suggests the likely cause, such as a deficit typed as a positive number, and can fill empty boxes from the accounts the company filed at Companies House. Taxley adds back the depreciation in your profit and loss automatically, and dividends paid have their own box in the retained earnings movement, outside the profit and loss account. It splits a period over 12 months into two returns, ticking box 50, and states the deductions allowance when losses brought forward are used, as CTA 2010 s269ZZ requires. A trading company also confirms that adjustments such as client entertaining are entered before it can pay.

Taxley has limits worth knowing before you start. HMRC's own filing service closed on 31 March 2026, so returns now go through commercial software (GOV.UK: Closure of HMRC's file-your-accounts-and-tax-return service). Taxley doesn't file R&D relief claims, terminal loss claims, consortium relief or the CT600J page, and an accountant is worth paying for those or for any treatment you're unsure about. Compare filing software, Taxley and an accountant, then take the 30-second check to see whether Taxley fits your company.

Frequently asked questions

Can HMRC reject a CT600 because of a formatting error?

Yes. Accounts and computations sent as a PDF instead of iXBRL are unacceptable for most companies, and HMRC's validation rules reject some tick-box combinations, such as boxes 70 and 75 together. A rejected return hasn't been filed, so correct it and send it again before the deadline.

Is there a penalty for an honest mistake on a company tax return?

Not if you took reasonable care: HMRC's factsheet says it won't charge a penalty then. A careless error can cost up to 30% of the extra tax due, and telling HMRC before it asks can bring that down to as little as 0%.

How do you avoid errors on a company tax return?

Check that both years' balance sheets balance and every item has last year's figure, make sure dividends, depreciation and client entertaining don't reduce taxable profit, count associated companies, report director's loans and losses correctly, and confirm each accounting period and payment date.

Do I need an accountant to avoid these mistakes?

Not necessarily for a simple company with tidy records, but an accountant is worth paying for groups, R&D claims, tax-avoidance disclosures, terminal loss claims or any treatment you're unsure about. The directors remain responsible for the return whichever route they choose.

General information, not personalised tax advice. Rates, dates and Taxley's checks verified on 26 September 2026; the directors remain responsible for the company's return.