Can client avoid a CT600 late filing fee?

Can client avoid a CT600 late filing fee?

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A client extended the accounting period of his company by 6 months but by the time he got his 18 month accounts done and we filed the two CT600s he got a penalty on the first CT600. The reason for this of course is because even if you extend the accounting period this does not change the date of the first CT600. Can anyone think of a reasonable excuse that he could put to HMRC? And before anyone says why bother for £100 the guy is virtually bankrupt. 

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By Steve Kesby
20th Mar 2012 10:56

He probably doesn't need a reasonable excuse

If the two CT600s are both for accounting periods (ie the company had some activity bringing it into the charge to Corporation Tax), then the filing date for both returns is 12 months from the end of the Period of Accounts (para 14(1)(b) of Sch 18 FA 1998).

This frequently happens when companies change their ARD and don't bother telling HMRC.

Flat-rate penalties only arise in respect of failures to deliver by reference to the filing date.  Only tax-geared penalties arise in respect of failures to deliver by reference to the end of the accounting period.

If a CT600 for a non-accounting period (where the company is dormant in the period) gives rise to a penalty, HMRC will generally waive it.

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Euan's picture
By Euan MacLennan
20th Mar 2012 13:27

Nor does the client even need to appeal

I agree with Steve.  There is no legal basis (here is a link to FA 1998, Sch.18, para.14) for a late-filing penalty if the CT600 for the first 12 months of an extended period of account of 18 months is filed within 12 months of the extended accounting date.

You don't appeal.  You complain and demand that the Revenue rectify their error by cancelling their penalty.  They won't, but they will reduce it to nil.

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By kenny achampong
20th Mar 2012 21:19

I agree

I wrote to HMRC recently with exactly this situation and they reduced the penalty for the first return to nil.

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DougScott
By Dougscott
21st Mar 2012 11:12

Thanks for the advice everyone - not something I had encountered before so good to know.

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By Snoppy76
31st Mar 2015 11:43

I've just had a similar situation and looking for answers. Company was incorporated on 7/2/13 and the accounting period extended to 31/3/14. The abbreviated accounts have been submitted to Companies House (client has paid the late filing penalty) and the 2 CT600's submitted today via HMRC website (ixbrl problems) to meet the filing deadline. The client has been charged £200 by HMRC for late filing of 2 CT600's (6/2/14 and 28/2/14). Will they automatically waive this once they have confirmation or do they need a written explanation. There is no corporation tax payable.

I seen this example on a tax blog from a firm of accountants. If the accounts are extended then the first CT600 has 12 months after the extended period to file the return. Am I missing something here. The example (part 1) is incorrect? The return can be submitted by 31st March 2014

 

Example (from Tax blog)

A company is incorporated on 1 January 2013, and starts trading on the same day.

It chooses to prepare its first Companies House accounts to 31 March 2014. It must file those accounts at Companies House by 30 September 2014.

The company has 2 HMRC accounting periods:

 

1 January 2013 to 31 December 2013, being the maximum length of 12 months, as nothing else has happened to close the period early. This period will comprise 12/15 (approx) of the profits in the Companies House accounts. The tax is payable by 1 October 2014, and the accounts and tax return should be submitted by 31 December 2014.1 January 2014 to 31 March 2014, being the period from the end of the previous period, to a Companies House accounts date. This period will comprise 3/15 (approx) of the profits in the Companies House accounts. The tax is payable by 1 January 2015, and the accounts and tax return should be submitted by 31 March 2015.

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