In the past, when an application for striking off has been made to Companies House, it has been our policy not to prepare statutory accounts for the final period/year as Companies House does not require them and because the date of application falls several months before the accounting reference date.
In such circumstances, we have submitted accurate and detailed management accounts, signed by the directors, to the Revenue in support of the relevant Corporation Tax returns. Sometimes the Revenue accepts these, and sometimes rejects them on the basis that there is no directors' report. We have always re-submitted the management accounts stating that no directors' report is required, and the Revenue has accepted this.
On the most recent occasion, the revenue has insisited on a directors' report. We argued that the nature of a directors' report is that it is prepared only when statutory accounts have been prepared, and as no such accounts have been prepared in this instance, no directors' report exists. The Revenue stated verbally that it also required statutory accounts. We managed to agree with the Revenue to submit some sort of directors' statement containing all the information in a directors' report but not statutory accounts.
The Revenue stated that when online filing is mandatory, statutory accounts will be required or else the Corporation Tax return(s) will be rejected.
What do other firms do in such circumstances, and what are they planning to do when online filing is mandatory please?
Replies (5)
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Do statutory accounts!
If I've prepared management accounts that are accurate for the closing of a company, that means I have a TB. It's therefore not too much work to chuck it into accounts production softweare and give it to them in the statutory format.
Little to do
For small companies the directors report is who the directors were and the trade undertaken in the year in question. Look under the companies act if you want confirmation. Why HMRC get hung up on this I dont know, but it is best to head up the information 'directors report' otherwise they reject them until you point out the text.
Same experience
Hi - In the past year I've had one inspector accept my assurance that the only taxable income in 9 months is £100 of interest and another insist on full accounts for an NFP company that had never posted a taxable profit. As Monsoon says, I just prepare what they want, via Iris, but don't anticipate it, ie do the minimum first but warn the client they may need more.
Given the whole ESC C16 process is up for consultation (see question last week) maybe a common approach will be adopted?
Accounting date
It makes no difference for these quasi-statutory accounts. Either prepare them to the normal ARD and state in the Directors' Report that the company ceased trading on an earlier date or prepare them to the date of cessation. Either way, the CT accounting period is to the date of cessation.