Penalty determination but only after I changed the accounting period date.....

 I'm about to appeal a penalty determination received today, but wanted to check that I was actually on the right footing....

A client had the corporation tax period as the 13th of April 2009 to 12th April 2010. I prepared two sets of accounts - one to the 30th April 2009 which was dormant, and then 12 months after that. The original required submission date of the corporation tax return and the accounts was the 12th of January, which was the day I submitted both returns online.

Today I have received a penalty notice for £200 for the client for the period 13th April 2009 to 30th April 2009, with the date of CT return due as the 30th August 2010. But HMRC did not send a request for this period and with this deadline.

Am I correct in that I have grounds to appeal?


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03rd Feb 2011 13:14

Was the original notice to deliver dated 30th May by any chance?

The original notice specifying a period 13th April 2009 to 12th April 2010 and a filing date of 12th January 2011 is just a "Notice to deliver a Corporation Tax Return".  What actually needs to be filed in responce to that notice, and when, is determined by what the actual accounting periods/non-accounting periods are.

In this case, you seem to have an accounting period beginning on 1st May 2009 and ending on 30th 2009.  As a result, the return required by the notice you've received should be for a period 13th April 2009 to 30th April 2009.

The filing date for that return is the later of:

12 months after the end-date of the return (30th April 2009), ie 30th April 2010.3 months after the notice to deliver is issued.  I imagine that took place on 30th May 2010, hence the "new" filing deadline of 30th August 2010.

If the notice to deliver was issued on 30th May 2010, the penalty is strictly due.  HMRC are generally amenable to waiving penalties for dormant compaies/dormant periods though.

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Dates in question.....

Thanks for your reply.

It says "Notice Issued on 24th May 2010 Specifying the period from 13 April 2009 to 12 April 2010". Due date is 31st August 2010 on the penalty determination.

I guess I'll appeal based on dormancy and hope they relent. If I'd realised this would trigger a penalty then I would have suggested a year end date of 31st March 2010 and hence not needing a short 2 week period at the beginning.


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03rd Feb 2011 15:36

I am a bit confused

A company having an annual corporation tax accounting period starting on 13th April 2009 (or any other date apart from the 1st) sounds like that was the date of incorporation.  If it is a new company, no CTAP starts until it starts trading, which is why they ask the question on form CT41G, New Company Enquiry, but if the CT41G is not returned to HMRC, they default to the date of incorporation as the start of the first CTAP.  However, if the company has not actually traded, there is no CTAP and no return is required and no penalty can be imposed.

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03rd Feb 2011 15:56

Sorry Euan, but that's not correct

Whilst I accept your point that a CT41G would have helped, if a notice to deliver is issued, the law requires that a return be delivered by virtue of para 3 of Sch 18 FA 1998.

Para 5 then dictates what period a return should cover in response to that notice.  If the company is outside the charge to corporation tax and so does not have accounting periods, a return is required for the period specified in the notice.

In this situation though, I'd understood that trading (and the first accounting period) had started on 1 May 2009 and ended on 30 April 2010.  Since no accounting period ends in the period specified by the notice, but one begins in the period, a return is required for the period covering the beginning of the period specified in the notice to the day before the actual accounting period starts, ie 13th April to 30th April (para 5(3) of Sch 18 FA 1998).

If that return is delivered late, then technically a penalty arises.

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By bduncan
03rd Feb 2011 16:12

Why prepare a dormant set of accounts to 30 April 2009?

Why did you not just file a set of accounts for the period ended 30 April 2010? and state that the company commenced trading on 1 May 2009. Then you could either have filed 2 CT600s for 13th of April 2009 to 12th April 2010 and one for the period 14th of April 2009 to 30th April 2010 or one for the year ended 30th April 2010.

The DCA will have confused HMRC and that is why they issued a notice to deliver. If you had not filed the DCA then you would still have a few months to file.

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