What is corporate tax and what does a corporate tax accountant do?

Corporate tax, also called corporation tax or company tax, is a direct tax collected by the government as a source of income. Corporate tax is based on profits and must be paid by UK entities such as limited companies and foreign companies with a UK branch. If a company is liable for corporate tax, they must calculate their profit for each period and the amount of tax they need to pay. This information must be reported to HMRC on a corporation tax return form with the accounts and tax computations submitted in support.

Corporate tax accountants assist with the preparation of company accounts, company tax returns and tax computations. They can also provide advice on tax strategies that could benefit the organisation and the best way to structure the business for growth and risk mitigation.

Key responsibilities

Responsibilities will vary, but examples include:

  • Collating a company’s financial data, ensuring all accounts are in order.
  • Calculating corporate tax owed.
  • Filing annual tax returns in a timely manner.
  • Analysing a company’s structure and determining a budget accordingly.
  • Identifying potential tax costs or inefficiencies arising from business transactions and proposing corporate tax reliefs or exemptions that can legally minimise those costs.
  • Identifying ways to mitigate tax risk.
  • Keeping up to date with current tax procedures and developments.
  • Assisting during internal audit processes.

Why are they important?

Effective corporate tax planning can result in potentially significant improvements to a company’s bottom line. Professionals in this area are very aware of current corporation tax reliefs and rates (which can change annually) and are able to advise organisations how to make the most of the exemptions, allowances and deductions available.

Skills needed for this role

Corporate tax accountants require excellent numerical and analytical skills. Strong communication skills, both written and verbal are also essential to enable them to communicate internally and externally at all levels.

Strategic Professional Options examinations linked to this role

Advanced Taxation

Career opportunities presented by this role

As with many tax roles, there are a number of jobs available in-house as well as in practice. Within accountancy firms, there is the opportunity to progress to partner for those who demonstrate exceptional business development, management and strategic skills as well as technical aptitude.

Competencies

High level competencies required include:

  • Audit and assurance

    A. Advises on and communicates effectively the role and scope of audit and assurance engagements to relevant stakeholders.

    B. Applies regulatory, legal, professional and ethical standards relating to audit and assurance engagements.

    C. Plans and prepares for audit and assurance engagements.

    D. Performs effective audit, and assurance engagements.

    E. Reviews and reports on the findings of audit and assurance engagements.

    F. Guiding efficient and effective operations.

     

  • Corporate and business reporting

    A. Prepares financial statements, corporate financial and integrated reports for external stakeholders using appropriate technology.

    B. Leads effective decision making through analysing, evaluating and communicating performance and position of entities.

    C. Prepares financial statements for groups of entities using appropriate technologies.

    D. Monitors, critically evaluates, and advises on the relevant accounting standards, regulations, conceptual and financial reporting frameworks.

     

  • Taxation

    A. Communicates knowledge of the operation and scope of the tax system, obligations of taxpayers, and the implications of non-compliance and advises on tax planning.

    B. Advises ethically on strategic tax plans and computes the tax liabilities of individuals.

    C. Advises ethically on strategic tax plans and computes the corporation tax liabilities of individual companies and groups of companies.

    D. Explains and computes the effects of value added tax (VAT) / goods and services tax (GST) and indirect tax on incorporated and unincorporated businesses and advises appropriately.