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Corporation Tax interest on extended AP

Trying to find guidance on reckonable dates

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We extended an AP for a company to 15 months and submitted CT Returns and Accounts within the 9 months window for the new date. As this was a change from December to March and as the rate changed from 20% to 19% it was simplest to send one Return for 3 months to 31 March 2017 and another for 12 months to 31 March 2018.

This upset the HMRC computer which expects a 12 month period to be followed by a shorter one but that is not the problem. Neither are late filing penalties which the computer spewed out but which were withdrawn after objection.

HMRC has not corrected the reckonable date for the AP 31 March 2017, resulting in an interest charge. I say that it should be amended to fall in line with the AP to 31 March 2018 (which would be consistent with the treatment on penalties). HMRC officers cannot quote me an internal instruction nor legislative authority for their line, and I have not been able to find the same to refute it.

This must be a common situation.

Can anyone help please?

Replies (8)

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By Matrix
29th Mar 2019 16:41

The tax is still due 9 months and 1 day after the accounting period. I thought the period of account had to be split into a 12 month accounting period plus an accounting period for the remainder.

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By Duhamel
29th Mar 2019 16:54

You might like to look at CTA 2009 S10 on what ends a corporation tax accounting period. Basically, I expect that a 12 month return followed by 3 month return was required here and HMRC are right to charge interest based on that. I'm not clear how the returns have been accepted without altering the period ends though.

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By Matrix
29th Mar 2019 17:02

So you agree with me that it should be 12+3 and not 3+12?

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By Duhamel
29th Mar 2019 17:19

Based on the information supplied, yes - that is what I said.

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By Duhamel
29th Mar 2019 16:46

Not everyone makes up their own period ends, so no - it isn't a common situation.

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David Ross
By davidross
29th Mar 2019 17:39

Thank you for the legislative guidance - I had missed that and clearly I DID break the CT Returns at the wrong point (lesson learned).

What does the community think about the practical aspects? Should we be filing estimated Returns for the 12 months as we wait for the end of the extended period (which could in theory run for 23 months).

And where can I find the rules about interest charges in such matters?

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Replying to davidross:
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By Matrix
29th Mar 2019 17:44

How did you submit the returns if the 15 months accounts have not yet been filed? Don’t understand the middle paragraph.

Why haven’t you paid the tax? Are these your accounts or a client’s?

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