I have a new client who submitted dormant company accounts for his company for the period to 31 March 2010.
In fact the company had incurred expenses during the period, but the client didn't ask the advice of an accountant and decided that his company was dormant because it had no turnover, and that he would just add these expenses into the accounts to 31 March 2011.
It seems to me that the three options are:
1) Resubmit correct accounts to 31/3/10, together with a CT600 showing a nil liability and a loss c/f. Then do 31/3/11 accounts and tax as normal. Disadvantage, of course, is client having to pay costs for two sets of accounts and tax returns.
2) Prepare accounts to 31/3/11 including the expenses from the pre 31/3/10 period. The "most attractive" route, but not strictly correct and potentially further complicated by the fact that the client may have submitted VAT returns in the period to 31/3/10 clearly showing that there was expenditure (I don't know yet if this is the case or not, but do know he's been VAT registered from the start).
3) Prepare accounts to 31/3/11 NOT including the expenses from the pre 31/3/10 period - i.e the client effectively loses the tax relief on these expenses.
Any advice very much appreciated.
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How much?
Are we talking about here?
And how much are the 2010 expenses in relation to the 2011 ones?