I have been approached by a pre-school playgroup who were foolishly advised to give up their charitable status and incorporate by guarantee in July 2012.
A single set of accounts was done (not by me) for the period ending 31 August 2013 (the company's AR date) and cover the whole period. Their profit is only £485 on Income £30k
They have been filed at companies house but no CT return was done. Now HMRC have written (naturally) requesting same.
Clearly two CT returns will be required (assuming the company was not dormant at the outset) One from July-August 2012, the second Sep 12 - August 13.
Is it reasonable to pro-rata income and costs from the existing accounts? - which I believe are accurate
Will a re-filing to Cos house trigger a late filing penalty?
Should I let the 425 days accounts lodged at Cos house stand-there will be an additional creditor; me.
Any thoughts welcome.
Replies (13)
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Yes it's reasonable to time apportion between the two CT periods.
Don't understand your reference to re-filing at CH. What would you be re-filing and why?
If you do file
amended accounts at Companies House there will be no penalty.
I don't understand your comment that by incorporating they have lost their charitable status.Many Charities operate via a Limited Co by Guarantee
Because
Why did incorporating mean them giving up their charitable status?
I'm assuming they were an unincorporated charity and decided to (1) set up a company and transfer in the charity's assets and (2) dissolve the unincorporated charity thus giving up charitable status. If they wanted to retain charitable status they would have to register the company as a charity because charitable status cannot be transferred.
P.S.
You can't put in a creditor at 31 August 2013 for your fees if you have only just been appointed now.
And wrong dates
If the company started trading on (say) 15 July 2012, their first CT accounting period and return will be for the year to 14 July 2013 and the second one for the short period from 15 July to 31 August 2013.
But Yes - you time apportion the profits between the two periods and file them both with the one set of accounts for the whole period by 31 August 2014.
But ...
A charity has to apply its assets for charitable purposes only - it cannot transfer those assets to a non-charitable body.
You need to speak to the Charity Commission, don't just look on the website.
I agree
A charity has to apply its assets for charitable purposes only - it cannot transfer those assets to a non-charitable body. You need to speak to the Charity Commission, don't just look on the website.
The CLG would need charitable status before an asset transfer could take place.
Apportioning results
I assume you are not using CT software to complete the CT returns, as if you were the apportionment would happen automatically.
I don't know if the HMRC website service can do this, perhaps someone else on here has experience of it and can enlighten us.
Check the Mem & Arts becuase
Check the Mem & Arts becuase it could be a case of them retaining their charitable objects in the Mem & Arts in which case they are a charity which hasn't yet registered.