One of my client for the first time in years has a loss from high taxable profits in previous years.
I would be grateful for views on whether it is good practice to use the white space on CT600 to explain why this has been the case. This to avoid any further enquires from HMRC.
The accounts would explain why this is the case.
Thanks
Replies (7)
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What white space?
There is no white space on a CT600 so any explanation would need to be as an added document or a note in the computation itself.
End of computation
My software has the ability to enter extra information and this information is entered at the end of the computation.
White space ...
I think it is good practice to use the white space but in this day and age of on-line filing, I think it is only useful to outline potentially controversial treatments or interpretations your have applied. The theory is that HMRC cannot 'discover' something you told them about at the time of submission even though no human will have looked at it. I don't, however, see any point in explaining something like you describe as I assume once a file is selected for enquiry then they are going to enquire anyway. Perhaps others may think (or know) otherwise?
Depends
Doesn't it depend on the reason for selection? If it was at random then nothing should make any difference but if it was selected because of the change in fortunes maybe it would make a difference.
Possibly Peter .....
but I'm not really sure how it works. I am sure in the old days an inspector would review submissions as made and look for 'potential' in them (taking in to account our explanations). I assume nowadays that risk based sampling is applied and a list generated by the 'system' and an enquiry is then opened regardless of any notes left in the white space. I might be wrong of course.
I would say do it..............
on the basis that HMRC cannot make anything under discovery and on your client possibly being profiled for investigation under the computer risk assessments, the "white space" information may answer the question and avoid further requests for information.
However do bear in mind that nobody actually "reads" notes or computations. I put in three loss c/back claims which seperate pdf computations and they were ignored. These were only actioned on intervention through a telephone call to the CT office and even then hmrc denied they had recveied the c/back claim even tough I could see it on my theird party submission log.
Although technically there isn't a white space on the CT600 only the SA forms, we all understand your sentiments.