Hi All,
I find it frustrating that when you register a new company with companues house they seem to issue a Y/E date and the first period always ends up being a 12.5 month year. From a CT600 perspective, 2 need to be filed so I usually will file a short one as a dormant period and then a 12 month one as a full trading year. i.e.
Y/E 31st August 2014
Date fo Registration 6th August 2013
CT600 - 6th August 2013 to 31st August 2013 - Dormant
CT600 1st September 2013 - 31st August 2014 - 12 month trading.
The problem I have had recently is that HMRC have sent late fines for the short return.
Anyone else had this and what is the way around?
Thanks guys.
Replies (19)
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Well you have at least two simple ways to solve the solution...
1. File the dormant accounts with 12 months of the end of the accounting period, in your example, before 31/08/2014.
2. Don't have a dormant period and have one long period of trading, so your CT600s would cover,
a. 06/08/2013 - 05/08/2014
b. 06/08/2014 - 31/08/2014
This means ...
That you incorporate your companies on the first of the month.
The reason that companues house insist on using the end of the month as tha accounting reference date, is because that is what the law says!
... your first accounts will be 13 months so a pretty useless bit of advice in terms of the OP.
I would form the company on the last day of the month, start trading on the next day and tell HMRC this, then no CT600 is due for the one day period.
Why for the dormant period?
Surely the mistake you have made is submitting a CT600 for a dormant period when no CT600 is required?
Previously discussed...
Hi khalm0,
See this thread and what Euan suggests:
https://www.accountingweb.co.uk/anyanswers/question/new-company-corp-tax...
Missing the point
But the late filing penalty for the 31 August 2013 CT return has been raised in error as the filing date for it is 12 months after the end of the period of account which it falls into - namely 31 August 2015 - a common mistake by HMRC.
Why accept Companies House date?
Why not change the Accounting Period date shortly after incorporation - i.e. incorporate 6th August;Co House allocates 31st August as AP; change that to 31st July
Well if it is not an accounting period then no return is due - so how can there be a penalty for being late in submitting it?
Getting HMRC on track
Regarding getting HMRC to issue a notice to deliver a CT600 for the correct period this is achievable by notifying HMRC of the company's start of trading date which is often days, weeks or months after the incorporation date.
There is an obligation to advise HMRC of the coming into charge for CT within 3 months of that occurence. From time to time I see a few non-compliance examples in this respect and assume that no automatic penalties system are set up in HMRC systems as never heard of any penalties being issued for this non-compliance.
If no such notification is made then HMRC are most likely to assume that trading commenced on the date of incorporation.
As an example a client was incorporated on say 8th November 2013.
Started trading 1st Jan 2014 and chosen first annual accounting date is 31 December 2014.
HMRC had to be (and were) notified by 31st March 2014.
Result: I have in my possession CT603 stating CT600 due for 1 Jan 2014 to 31 Dec 2014 (and going online to client list at HMRC services / CT find that no prior CT600 required).
John - HMRC's computer will have issued the penalty automatically because the OP doesn't appear to have told HMRC that the company was dormant.
As soon as they do the problem should be solved as HMRC will be able to amend their records to show no CT600 due for that period.
I have found
that HMRC normally send a CT41G, which actually states "you must send us information within 3 (three) months of starting your first accounting period".
So you go on line, tell HMRC that you started on 1st of the month following registration (or whenever you do start trading).
Appeal The Fine
As there shouldn't have been a CT600 for the period ended 31/08/13 why not appeal against the fine? This should be done in writing within 28 days to the company's "local" corporation tax office (usually a Glasgow address) explaining that you have been fined for a late return when no return was due. I had this a long time ago and HMRC was pretty helpful and cancelled the fine.
HMRC manual COM100020 might also be of help to the OP and confirms that HMRC will waive any penalty charged for the return.