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Is the CT payment reference acc. period important?

How important is the accounting period part of the corporation tax payment reference.

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I’m looking at the possibility of automating our monthly corporation tax reminders. We use CCH, and the report function enables me to run a report each month, which shows all the clients that have a corporation tax liability to pay.

There is also an email merge function where I can have a standard wording explaining how to pay etc, and the client specific information is fed in from the report I run (company name, amount, UTR, contact email address).

On the whole, I can get a pretty decent looking reminder set up, which shouldn’t take too long to run and send for a batch of clients.

The problem with corporation tax is of course the payment reference, where we need to add in A001**A to it.

I know we can just go for a generic A00101A to the end, and it’ll make it’s way to the correct period eventually. Putting the side that it doesn’t look particularly professional, could we encounter problems at HMRCs end if suddenly 700+ companies from us suddenly started using a generic accounting period in their reference?

Has anyone ever encountered any problems using a generic accounting period? We’ve had to do it in the odd case in the past without issue.

All client’s is probably too much. I think I may already have my answer to this.

Replies (12)

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By lesley.barnes
14th Feb 2020 17:01

I've had clients get their payments returned several weeks later if they've used the wrong year. I had one on Monday who had used last years reference because it was set up in the bank account. No one at HMRC seems able to allocate the payment to the correct year. It might cost you time ringing HMRC and getting it allocated to the correct year.

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Replying to lesley.barnes:
Lone Wolf
By Lone_Wolf
14th Feb 2020 17:14

That was my worry. The few times we've used it's not been an issue, but I'm sure I called on at least a couple of occasions.

Probably need to come up with something different.

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By Matrix
14th Feb 2020 17:14

Completely agree with the above. Don’t do it.

HMRC repay overpaid corporation tax within days by cheque. You would have to call up and get it allocated to the correct period. The HMRC system doesn’t seem to do it without manual intervention so I expect you will have to manually insert the reference into the email in your system. It usually moves on by 01 each year but not always. It is a real pain giving it to clients and then sorting it out when they use the wrong reference, not helped by the absence of paper reminders these days.

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By GW
15th Feb 2020 10:42

I've just been dealing with one where the cheque returning the payment that had been allocated to the earlier period arrived in the post with a seperate letter asking for the amount due for the later period. There is a lack of common sense here.

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By whitevanman
15th Feb 2020 14:06

As far as I recall, if you send a payment showing (say) AP3, the computer will look at that period and if nothing is outstanding, it will be repaid. If however a payment is made without specifying an AP it may be allocated to any outstanding amount. The problem with that is the amount could be something other than CT (PAYE for example). It needs to be clear from whatever you send that the payment is of CT but if you get to that point, it is better to put the correct AP reference on the payment and it will go to the right charge.

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By atleastisoundknowledgable...
15th Feb 2020 16:13

Contrary to the rest of you, we just tell client to pay with the UTR as the reference - never had any problems.

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Replying to atleastisoundknowledgable...:
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By AWeb72
16th Feb 2020 09:04

Not sure how, you've been very fortunate. HMRC don't tell you to use the specific reference for no reason

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Replying to atleastisoundknowledgable...:
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By Mr_awol
17th Feb 2020 11:37

I've got one who has paid against the 2015 reference for the last three years. Even though I flagged it this year, I think he's just got 'HMRC tax' set up as a payee on his online banking and has never bother to change the ref. HMRC have re-allocated it without question or instruction every year.

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By Mr_awol
17th Feb 2020 11:35

I used to tell the clients to give me time to submit the CT600 before they made payment, and I used to tell them to be very careful to make sure they used the correct payment reference. This was to prevent refunds being issued.

However, it must be said that I haven't had any CT refunds incorrectly returned by HMRC for these reasons for a good couple of years. I'd assumed they'd finally worked it out (or just decided on a policy of keeping money until the taxpayer asked for it) s am surprised to see posters talking about current cases of HMRC returning money. I believe this will only happen in the minority of cases.

Indeed, I had a client last month pay HMRC by mistake using his reference for a supplier account. The Revenue wrote back to him a couple of weeks later saying the had the cash and asking for a ref so they could allocate it. It wasn't refunded even though his company is completely up to date on all taxes.

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Replying to Mr_awol:
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By atleastisoundknowledgable...
17th Feb 2020 11:43

Mr_awol wrote:

p>Indeed, I had a client last month pay HMRC by mistake using his reference for a supplier account. The Revenue wrote back to him a couple of weeks later saying the had the cash and asking for a ref so they could allocate it. It wasn't refunded even though his company is completely up to date on all taxes.

I presume that the client had to ask for them to look for the money initially & HMRC weren't psychic?

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By Roland195
17th Feb 2020 11:45

As with all things at HMRC, it seem it depends on so many factors as to be basically random - some clients ignore the payment reference with no problems whatsoever, some have payments randomly allocated against earlier years & some have immediate repayments issued (faster usually than if we'd actually requested it).

I have a suspicion that no reference at all other than the UTR goes before a human who attempts to make a sensible decision which goes to show that non-compliance seems to achieve better results.

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Hallerud at Easter
By DJKL
17th Feb 2020 15:16

I am in the midst of finding our monies right now with HMRC so would also reinforce the importance of references.

I have two £10,000 payments made re our CT liability still missing ,albeit they have the other five (I stupidly added a K to two so think they may have somehow been allocated to Income Tax) I have a s458 repayment due to us lost somewhere in the ether and have just completed my call number three to HMRC re these sums.

In addition I have letters from Debt Management chasing monies we are not due (they are due to repay us).

A combination of bank controls not allowing more than £10k a day to be paid to HMRC and my not putting precise references (merely company UTRs) on each payment has to date wasted 2.5 hours of my life and I am no further forward; they are due to currently investigate and revert though am not holding my breath.

Methinks this is all going to require correspondence to get it resolved, all for the sake of a few letters re each payment.

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