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Help with amending accounts and ct600

My friend has been doing his own accounting and got it wrong

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I have a friend who has submitted dormant company accounts and no CT600 accounts for prior periods but does not fit the criteria to be a dormant company (purchased small items of plant). There will still be  no tax due. I am about to submit current year accounts and a ct600 for the most recent year and have a few questions.

I don't normally do this kind of accounting as I work in industry but I'd like to help get him back on track.

1. Is there an obligation for him to correct the prior period accounts and ct600 or can I just correct in the current year accounts?

2. Is the AIA on these prior period asset purchases lost (i suspect yes) and now only capital allowances are available?

3. In  general when does an obligation to amend accounts/ct600 arise (is there a materiality threshold deadline etc)?

Thanks,

Charlotte

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JCACE
By jcace
12th Sep 2020 22:15

Has the company started trading?

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By lotty666
12th Sep 2020 23:55

Yes revenue started being taken in the current year that I'm preparing the stats and ct600 for.

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RLI
By lionofludesch
13th Sep 2020 08:03

If you're not comfortable with this kind of work, point him in the direction of an accountant and give him a sharp push in the back.

You don't want to get into a "blind leading the blind situation".

If you do decide to dig him out of the hole, make sure you know who'll be handling the spade in future.

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By Tax Dragon
13th Sep 2020 08:47

Just one point, intended to add to those made by jcace and lion, with whom I agree.... (in what sense) are previous CT600s incorrect? A person (including a company) is liable to tax only on money* received [subject of course to various anti-avoidance rules that can indeed tax a person on money* not received]. By the same token, a person (including a company) is entitled to certain reliefs and allowances (including capital allowances) only if in receipt of taxable income (or at least, in possession of a source of taxable income) against/from which to set/deduct the relief or allowance.

You say revenue did not commence until the latest year. Hence my question - what is wrong with earlier CT600s?

*using this word for simplicity and for the limited purpose of this thread. Anyone searching for "barter transactions", for example, must not place any reliance on my comment.

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By AWeb72
13th Sep 2020 09:27

He needs an accountant to deal with his affairs. With respect, this scenario is straightforward for an accountant so if you don't have the knowledge to deal with it you would be doing them a big favour by saying so.

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By Paul Crowley
13th Sep 2020 13:04

Why a company?
Self employment much cheaper in accountancy fees.

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Replying to Paul Crowley:
RLI
By lionofludesch
13th Sep 2020 14:33

Paul Crowley wrote:

Why a company?
Self employment much cheaper in accountancy fees.

Too late for that piece of advice, I'm afraid

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Replying to lionofludesch:
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By Paul Crowley
13th Sep 2020 15:48

But a good reason to talk to an accountant at beginning of a trade.

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Replying to Paul Crowley:
RLI
By lionofludesch
13th Sep 2020 15:56

Paul Crowley wrote:

But a good reason to talk to an accountant at beginning of a trade.

Couldn't agree more.

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By Calculatorboy
13th Sep 2020 18:30

You'll lumber yourself with this job , as others say he needs a practitioner ,ps wouldn't bother with prior yr adj, treat assets as purchased by him personally, then sell to co. in current year at mkt value , loses AIA but will get wda.

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