Client first year end was 31/5/2013. Company was incorporated on 30 May 2013. I therefore did 2 CT600's as required. Online statement shows a deduction against one day's CT with the remark "Not currently being pursued". I am guessing they are saying it isn't to be chased by debt collectors. Am I right?
Client has set up payments for both amounts meanwhile.
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Yes - but note the word "
Yes - but note the word " currently". They haven't cancelled the debt
I have the Answer!
Being early in the morning, I decided to battle through the call options and got a sensible HMRC person who told me that because £15.80 is under their minimum amount - which may be around £30 they have written off this amount and client doesn't have to pay.
I am stunned, but client will be pleased. Interesting tax planning option methinks, but probably not worth an awful lot.
I've just seen one for £53.80 not currently being pursued. So their minimum threshold must be more than £30. In this case at least.
Correct
It is important to remember two things though. It is only currently not being pursued, so it could be pursued at some point in the future. It is also still considered as owing.
I have something similar on a CT statement for one of my own clients. In that case, we have asked for a CIS offset, and the "not currently being pursued" amount is what would be covered by the offset once I can get them to agree to it. Not quite sure of the reasoning in your case.
EDIT: They have told you it is written off? That isn't what the statement is saying. Has HMRC person got the wrong end of the stick and this amount will actually stick around until a large enough amount to collect is added on?
Similar here
Client had £29.80 CT to pay, went online to confirm balance before reminding client, balance had been reduced to £nil with 'currently not being pursued', have to admit my initial reaction was 'fantastic' and then had a nervous thought that it may mean that they intended to launch an enquiry so collection was being suspended. Useful to hear of the £30 figure from someone else.
Amount has been written off on online statement
Balance for that period shows as nil. Therefore unless they write it back to that account it won't show as outstanding.
I think from what Bernard is saying I ought to have a look at that period every now and again to see whether they've changed their minds.
Although HMRC person assured me he doesn't have to pay, we can't really believe a word they say in this sort of situation I suspect. Bearing in mind the appalling and wrong advice I've had from other areas of HMRC only recently it's best to be cynical.
Have you got your dates right?
I assume you meant to say that the company was incorporated on 30 May 2012, rather than 2013.
Did the company start trading on the following day, 31 May 2012, so that the first CT600 covered the 12 months to 30 May 2013, leaving the second CT600 to cover just the one day, 31 May 2013, which you mentioned? Or did it start trading immediately on 30 March 2012, in which case the second CT600 would have covered 2 days?
So we are saying that HMRC is writing off balances before they even become due! That might explain a little of the tax gap. I can understand them not chasing a small balance due to the costs involved, but writing off before you have had a chance to pay it! (I'm not disagreeing with the posts above - more shaking my head HMRC again).
Technically 13 days overdue
In my clients case (31 March year-end), £29.80 therefore payable by 1 January, the CT return was filed in December, I checked the position online on 14 January and HMRC had already decided not to pursue it, even though client was more than willing to pay it, they'd just forgotten for a couple of weeks.
I took a screenprint just as a precaution that HMRC don't suddenly amend their account at some point in the future and hit the client with penalties and interest.
Amazing really, in this case the collection costs to them would have been £nil, as the client was about to pay.
Dates etc
Sorry not to be correct with the dates. I did get the dates correct with HMRC. Company inc on 31 May 2012. Therefore CT600 required from 31/5/2012-30/5/2013. Extra day of 31/5/13 required as that is year end. Company started trading immediately incorporated.
Having read all your advice I have emailed client to say best pay up. He's just replied saying he feels that is the best thing. Certainly if it were my company I would pay, given it's a small amount and no one can allege non payment later.