7 Common Mistakes to Avoid When Filing Corporate Tax Returns in London, ON

Staying Compliant Starts with Avoiding Common Errors

Filing corporate tax returns is a necessary part of operating any incorporated business in Canada. For companies based in London, ON, meeting the expectations of the Canada Revenue Agency (CRA) requires more than just submitting forms on time. Accuracy, compliance, and proper documentation are essential for avoiding penalties and staying on the right side of tax regulations.

While corporate tax return services in London are available to help with this process, many business owners still make avoidable mistakes—often due to limited understanding or oversight. In this article, we’ll go over seven common errors businesses make when filing their corporate tax returns, and how to avoid them.

1. Missing Filing Deadlines

One of the most frequent and costly errors is missing the corporate tax filing deadline. In Canada, corporations must file their T2 return within six months of the end of their fiscal year. However, this deadline can be easy to overlook, especially for newer businesses or those with non-calendar fiscal years.

Late filing not only results in penalties but can also raise red flags with the CRA. Using corporate tax return services in London can help ensure that reminders, calendar tracking, and electronic submissions are all properly managed—preventing unwanted delays or consequences.

2. Inaccurate Reporting of Income or Expenses

Underreporting income or misclassifying business expenses can lead to reassessments, interest charges, or audits. It’s critical to ensure all revenue sources are accurately reported, and that expense categories align with CRA guidelines.

Common examples of misreported items include:

  • Mixing personal and business expenses
  • Claiming capital expenditures as current expenses
  • Failing to report foreign income

A common misconception is that any business-related cost is deductible, but CRA rules are strict about what qualifies. Professional corporate tax return services in London can help ensure that reporting standards are followed properly and all figures are double-checked for accuracy.

3. Neglecting Tax Credits and Deductions

Many corporations leave money on the table by not claiming all available tax credits and deductions. The CRA offers various credits for things like research and development (SR&ED), digital adoption, hiring new employees, and environmental initiatives.

Failing to explore these options can lead to a higher tax bill than necessary. A proper tax filing strategy includes a review of eligible deductions and credits, which is something that experienced corporate tax return services in London often include as part of their process.

4. Not Maintaining Proper Documentation

It’s not enough to just enter numbers into a tax form—proper documentation is essential for substantiating every claim made. From receipts and contracts to payroll records and bank statements, your corporate tax file should be ready to support any line item on the return.

CRA audits can be triggered years after a return is filed. If documentation isn’t available or is incomplete, the business may face reassessments. Companies that use corporate tax return services in London often benefit from systems that track and store key documentation, reducing the risk of lost files or compliance issues.

5. Filing the Wrong Forms or Using Outdated Versions

While the T2 return is standard, there are numerous accompanying schedules and forms that apply depending on your business activities, such as Schedule 1 (net income adjustments) or Schedule 50 (shareholder information). Filing incorrect or outdated versions can cause the return to be rejected or reassessed.

Staying current with the CRA’s requirements is critical, especially since forms and rules change from year to year. Many corporate tax return services in London stay updated on these changes automatically, ensuring that all returns are prepared using the correct formats and criteria.

6. Overlooking Instalment Payments

If your corporation has a tax balance exceeding $3,000 in the current or any of the previous two years, it may be required to pay taxes in instalments throughout the year. Ignoring this requirement can lead to interest charges.

Many business owners are unaware of this threshold or miscalculate their tax liability, only realizing the issue at year-end. Engaging corporate tax return services in London can provide accurate projections and reminders to help avoid underpayment penalties and cash flow surprises.

7. Not Reviewing the Final Return Before Submission

Even if the preparation has been outsourced or handled by an internal bookkeeper, the final corporate return should always be reviewed by an authorized officer of the company. It's important to understand what’s being filed in your name, and to catch any errors before submission.

Mistakes in final figures, incorrect NAICS codes, or even typos in the business address can affect processing times or CRA responses. Many corporate tax return services in London include a final client review process before electronic submission, which allows for corrections or clarifications before anything is sent.

Why These Mistakes Matter

Corporate tax filing is more than a routine task—it’s a legal obligation that affects your business’s financial standing, reputation, and audit risk. Even seemingly minor errors can have significant consequences, including fines, interest, or a flagged CRA account. Avoiding these mistakes allows businesses to:

  • Maintain a clean tax record
  • Avoid unnecessary financial penalties
  • Build credibility with stakeholders
  • Stay organized for future filings

While the temptation may be to handle filings internally, especially for small companies, relying on corporate tax return services in London can provide an extra layer of accuracy and assurance.

How Professional Services Can Help

With CRA regulations becoming more complex and digital filings becoming the standard, many businesses are turning to professionals for support. Here's how corporate tax return services in London can make a difference:

  • Timely Filing: Automatic reminders and scheduling systems reduce the risk of missed deadlines.
  • Accurate Reporting: Experienced preparers understand how to apply the tax code to your business context.
  • Credit Maximization: Access to knowledge of lesser-known deductions and programs.
  • Audit Preparedness: Proper documentation and clear records help ensure that any future inquiries are easy to manage.
  • Efficient Processes: Technology-enabled systems streamline the entire process, from data gathering to CRA submission.

For many companies, the cost of professional services is outweighed by the financial and operational risks of getting it wrong.

A Smarter Approach to Corporate Tax Filing

Filing corporate tax returns in London, ON requires more than just filling out forms. Accuracy, compliance, and timing are all critical factors. From underreporting income to missing out on credits or filing the wrong documents, even small mistakes can lead to major issues with the CRA.

By being aware of these seven common pitfalls—and by considering the support of corporate tax return services in London—businesses can approach their filing obligations with more clarity and confidence.

If your organization is preparing for tax season, now might be a good time to reassess your approach and reduce the chances of error before the deadline arrives.