I am preparing the corporation tax returns for my client for their first year... obviously as it is their first year they have to file two (one for the first 12 months and another for the remainder of the period). Having now done the tax calculations for the two returns it looks like the first will result in a taxable profit, but the second will show a trading loss - not due to any year-end adjustments, just significant expenses in a short period.
My question is how this should be paid? Although they are separate returns, since they are being submitted at the same time, can they be combined and paid together? The statutory accounts that accompany them will show the combined number anyway. Or would it be necessary to carry back the loss?
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So you're preparing two sets of formal accounts which you'll submit to Companies House ?
Have you changed the ARD to allow you to do that ?
So you're preparing two sets of formal accounts which you'll submit to Companies House ?
Have you changed the ARD to allow you to do that ?
That's not what I read in the question. The question is about two CT periods within one long period of account. So one set of accounts but two tax returns.
The normal way of splitting the result for a long period of account is by time apportionment. Is there any good reason for not doing it that way?
Having now done the tax calculations for the two returns it looks like the first will result in a taxable profit, but the second will show a trading loss - not due to any year-end adjustments, just significant expenses in a short period.
Are you sure you are doing this correctly?
Shouldn't you take the one (accounts) period of account & time apportion it into the two (tax) accounting periods?
Edit: other answers weren't showing when I posted the above. Yes 52/56 & 4/56 will be fine. Or do it on the number of days
Did they really start trading on day 1?
Usually there would be a dormant period first for which no return is due anyway
If they were registered for CT from the incorporation date then a return for the dormant period is very much due, unless HMRC have been contacted and have agreed to withdraw it.
Just last week I appealed against a fine for late filing of the return covering exactly that dormant period so I'm fairly sure all else being equal HMRC still expect these to be filed.
If a company is dormant for a period, then it is incorrect to submit a CT return for that period. It is preferable to notify HMRC in advance to correct this, but I have submitted returns with accounts showing the start of trading date, and those have corrected the accounting periods.
Also, if two returns are due for the same accounting period, then the deadline for both is the normal one (i.e. 12 months after the accounting year end, not 12 months after each individual return).