CT600 box 4 code 2 explained
Short version. Code 2 in CT600 box 4 means close investment-holding company. It tells HMRC that the return uses the full main rate for each financial year, without the small profits rate or marginal relief.
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1. Understand the treatment
Box 4 records a tax classification, not your Companies House industry code. Decide whether the CIHC purpose test applies before choosing code 2. Read the full HMRC company-type list for other classifications.
Examples include code 0 when none of the listed types applies, code 6 for a members’ club or voluntary association, and code 7 for a property management company. An ordinary property investment company is not automatically a code 7 company. These examples are not the complete list or a statement that every type is supported by the service.
A CIHC leaves the small-profits-rate indicator in box 329 and marginal relief in box 435 blank. Check the full main rate in the financial-year blocks, including boxes 340 and 390 where applicable. Box 430 is Corporation Tax before marginal relief. Code 2 does not remove every other relief or the need to check instalment-payment rules.
2. Fictional worked example
A fictional CIHC has £40,000 chargeable profits for 1 April 2025 to 31 March 2026. Box 4 is 2, the applicable rate is 25% and tax is £10,000. Boxes 329 and 435 are blank. A return crossing 1 April may show two financial-year blocks instead of one.
3. Common mistakes
- Choosing code 7 just because a company owns a rental property.
- Leaving code 0 while approving a CIHC main-rate computation.
- Assuming two CT600 returns for long accounts must use the same company type.
4. How to file
SimpleCompanyTax prepares supported micro-company returns from your figures. Follow the exact filing steps and review each return’s computation before approving the filing. For more background, read all company-type codes and why CIHCs cannot claim marginal relief.
This is general guidance. Your company’s treatment depends on its circumstances. Decide the classification and claims yourself or with your accountant.