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New Company and Agent Authority

New Company and Agent Authority

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We formed a new company for a client in October 2013 which was to remain dormant for the foreseeable future. Our only communication with HMRC was to apply for agent authority for CT online as soon as HMRC had automatically generated a UTR and sent us the usual CT41G and 64-8. We received these within two weeks of formation. The CT41G clearly states you only need to contact HMRC within three months of the company becoming active. So we didn't contact them. On 15 January we received the CT610 showing the important dates, that is the first corporation tax periods.

I have just phoned HMRC to inform them that the company is dormant and they tell me me we must write in because they have been informed that the company is active. We know we haven't told them. We know the client hasn't told them. In fact the client wouldn't know as both copies of the CT610 came to us as the registered office.

I must assume that applying for agent authority online has triggered an "active" flag in their system. It is very irritating that you can tell HMRC many things online but you can't tell them they that have made a mistake and the company is not active. You have to write a letter! Has anyone else experienced this before?

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By Bob Along
28th Feb 2014 07:18

I am not sure that the agent authority does trigger an active flag. We have had a number of notices recently for clients with registered offices at our premises (where we have registered as agents) from HMRC which state they believe the company is inactive and they don't want a corporation tax return until 2018.

We have also found that once HMRC have asked for a tax return, it can be very difficult to get them to remove the requirement to have it filed, even if you do exactly as they proscribe. I would be vigilant with the correspondence for this client and tell them you may have to file a tax return.

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Replying to lionofludesch:
Stepurhan
By stepurhan
28th Feb 2014 11:00

Not for CT returns

Bob Along wrote:
We have also found that once HMRC have asked for a tax return, it can be very difficult to get them to remove the requirement to have it filed, even if you do exactly as they proscribe. I would be vigilant with the correspondence for this client and tell them you may have to file a tax return.
HMRC can require a personal return from anybody, and those will often have to be filed regardless of their personal situation.

CT returns can only be filed for periods of trading, so writing to HMRC to tell them it is not trading will eliminate the return.

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By petersaxton
28th Feb 2014 09:40

Write in

and tell them you will let them know when the company starts trading.

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