HMRC announce changes affecting Corporation Tax return submissions in the coming months
HMRC have announced details of changes and issues affecting the Corporation Tax online service, which may impact Corporation Tax returns being submitted in the coming months. These reflect areas where HMRC's online service still needs to be updated to incorporate recent changes in tax legislation.
Companies claiming new 40% first year allowance
The Form CT600 has not yet been updated for the new 40% first year allowance for qualifying expenditure on or after 1 January 2026.
Two new boxes will be added in April 2027 to allow companies to do so in future, but meantime the workaround is to claim the allowance by using boxes 725 or 750 for claim amounts and box 760 for qualifying expenditure.
First Year allowance for zero emission cars
The Autumn 2025 Budget confirmed the extension in the time period for the 100% first year allowance for zero emission cars to 31 March 2027 for Corporation Tax purposes. It is possible that some companies may not be able to claim the allowance for accounting periods starting on or after 1 April 2026 if they submit their Corporation Tax return before April 2027.
As a workaround, HMRC suggest that any claims for accounting periods starting on or after 1 April 2026 are reported in boxes 725 and 750 (other allowances and charges).
Loans to participators
Following the increase in the higher rate of Income Tax on dividends from 6 April 2026, this impacts on the rate of Section 455 tax on loans to participators in close companies. HMRC's online service is still to be updated in the increase in Section 455 tax rate from 33.75% to 35.75%.
As HMRC have indicated that this will not be updated until 6 April 2027, companies submitting Corporation Tax returns before then will need to record any Section 455 tax payable at the previous 33.75% rate before amending the return after HMRC's systems have been updated in April 2027. The ATT has provided feedback to HMRC of the importance of their systems being able to accommodate any future changes in Section 455 tax rate at the time it takes effect.
Other changes
HMRC have also made announcements for companies claiming Research and Development expenditure credit (RDEC) and tax relief for creative industries.
As well as these recent changes, HMRC have published a consultation on modernising and standardising company tax returns, which the ATT will be responding to. The proposals would require all companies to submit computations in a standardised fully tagged format. This is intended to reduce errors, improve clarity for taxpayers and agents, and allow HMRC to process returns more efficiently. If members have any comments or views on the consultation, please email them to [email protected] by 15 May 2026.