Outsource Corporation Tax Preparation to India — A Guide for UK Accounting Firms

What UK Accounting Firms Typically Outsource for Corporation Tax

Corporation Tax is one of the most time-intensive services a UK accounting practice delivers — and one of the least visible to clients. A straightforward SME CT600 can take four to eight hours of preparation time: gathering figures from the trial balance, building the tax computation, calculating capital allowances, and checking the result against the prior year. For a practice handling 50 or 100 CT600s a year, that is a significant block of staff time concentrated around year-end deadlines.

UK accounting firms that outsource to India typically hand off the following to an Indian CA team:

• Corporation Tax computation — adjusted profit from the accounts, add-backs and deductions
• CT600 form completion — all boxes populated from the computation
• Capital allowance calculations — Annual Investment Allowance, main pool, special rate pool, short-life assets
• Research and Development relief calculations (where applicable)
• Carried-forward loss relief calculations
• Group relief workpapers (for groups with multiple entities)
• Director's loan and close company adjustments
• iXBRL tagging of accounts for HMRC submission (where required)

Your UK practice retains responsibility for the HMRC agent relationship, the final review of the CT600, and electronic submission. The Indian CA team handles the preparation workload; your team handles sign-off and submission.

The CT600 Preparation Process — What Your Indian CA Team Handles

The workflow for outsourced CT600 preparation follows a clear sequence. Understanding the handoff points helps practices build a reliable process from the first engagement.

1. Your practice provides source documents. The Indian CA team needs the draft statutory accounts (or confirmed trial balance), a list of capital expenditure additions during the year, any R&D expenditure details, director loan account balances, and the prior year CT600 for reference. These are shared via a secure folder.
2. The Indian CA team prepares the tax computation. This includes calculating adjusted profits, applying capital allowances, checking for any disallowable expenditure (entertaining, depreciation), and computing the Corporation Tax liability. A clean trial balance with notes typically takes 4–8 hours for a straightforward SME.
3. CT600 is populated from the computation. All boxes on the CT600 are completed from the prepared computation. The Indian CA team cross-references figures against the accounts to confirm consistency.
4. A full workpaper pack is returned to your practice. This includes the tax computation with cross-references, the completed CT600, capital allowance schedules, and any notes on items requiring partner-level judgement (e.g. borderline R&D claims, connected party transactions).
5. Your practice reviews, queries, and signs off. The review step is where your UK-qualified staff apply professional judgement, confirm any borderline positions, and prepare the CT600 for HMRC submission.
6. Your practice submits to HMRC via your agent portal. This step always remains with your UK practice — the HMRC agent relationship, digital submission, and client sign-off are your responsibility.

Quality Control — How to Review CT600s Prepared Offshore

The quality control step is where most UK practices focus their attention when setting up an offshore CT600 arrangement. The review does not need to be onerous — the Indian CA team prepares a clean workpaper pack specifically to make the review efficient — but it needs to be consistent.

A reliable review checklist for CT600s prepared offshore:

• Confirm adjusted profit cross-references to the statutory accounts profit before tax
• Check that all disallowable items (depreciation, entertaining, fines) have been added back
• Verify capital allowance pools against the prior year computation — opening balances should match closing balances from the previous CT600
• Check that Annual Investment Allowance has not exceeded the annual limit (£1m per year, shared between connected companies)
• Confirm that the tax charge on the CT600 matches the accounts deferred tax calculation
• Verify the payment deadline — nine months and one day after the accounting period end for small companies
• Check the iXBRL tag mapping if the accounts are being submitted to HMRC inline with the CT600

For a straightforward SME, a thorough review using this checklist takes 30–60 minutes. For more complex entities — groups, R&D claims, or significant capital expenditure — allow 90–120 minutes. Either way, this is a fraction of the time required to prepare the CT600 from scratch.

Cost Comparison — In-House Staff vs Outsourced CT600 Preparation

The cost differential between in-house and offshore CT600 preparation is significant at the level of individual clients and material across a portfolio:

In-house costs assume a mid-level accounts assistant at £25–£40 all-in per hour. Offshore costs assume £8–£15 per hour at Sharma Jyoti and Co rates. A practice with 80 CT600 clients saves between £8,000 and £20,000 per year on CT600 preparation alone, before accounting for any reduction in overtime or seasonal capacity pressure.

The saving is additive to any bookkeeping or accounts preparation work also outsourced. Practices that outsource the full compliance workflow — bookkeeping, year-end accounts, and CT600 preparation — to an Indian CA team typically reduce their cost of delivery by 50–65% while maintaining or improving turnaround times.

What Always Stays With Your UK Practice

The division of responsibilities between the Indian CA preparation team and your UK practice is clear-cut. These activities never move offshore:

• HMRC agent relationship — all correspondence, portal access, and filings are handled by your UK practice under your agent credentials
• CT600 electronic submission — filed by your practice via HMRC's online service or third-party software (Iris, CCH, TaxCalc, etc.)
• Client sign-off — the CT600 must be approved by the client before submission; this is a client-facing conversation your UK team manages
• Professional judgement on borderline tax positions — where a tax position requires subjective judgement (e.g. an R&D claim boundary, a connected party transaction), this decision is made by your UK-qualified partner or manager
• Tax planning advice — structuring advice, loss utilisation planning, group relief strategy — all of this is advisory work that remains with your UK team

How to Set Up a CT600 Outsourcing Arrangement

Getting started with outsourced CT600 preparation does not require a long setup process. Most UK practices are fully operational within two to three weeks of their first engagement:

1. Start with two or three test cases. Select a mix of straightforward and mid-complexity clients. Review the workpaper packs returned and assess the quality before scaling up.
2. Agree a standard document pack. Define what documents your practice sends for each CT600 engagement — trial balance format, capital expenditure schedule, director loan analysis. A consistent input format produces faster, cleaner outputs.
3. Set turnaround expectations. Standard is 48–72 hours for straightforward CT600s. Agree a protocol for urgent cases (approaching HMRC deadlines) and a cut-off for information receipt to hit a given deadline.
4. Build the review checklist. Use the checklist in the section above and adapt it to your practice's standard review approach. The first three or four CT600s reviewed offshore will confirm whether adjustments are needed.
5. Scale to your full CT600 portfolio. Once the process is proven on test cases, extend to your full client base. The preparation cost reduction applies to every CT600 you outsource.

Sharma Jyoti and Co works with UK accounting practices on a per-client basis — there is no minimum volume commitment for CT600 preparation. You can outsource one client or one hundred, and the rate is consistent.

Frequently Asked Questions