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New CT41G letter

Three months to register for CT now in first paragraph

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Received a CT41G today for a new client company. Normally take a note of the UTR on it and file it in the confidential waste.

But the layout of the letter has changed and it makes it quite clear in the first paragraph you have 3 months of starting to contact HMRC to tell them you have started to trade for CT purposes. A colleague still had a copy of the old style and this point is hidden away on the back page.

So I thought what can they do?  Well ....

"If after 1 April 2010, you don’t tell HMRC that your company or organisation is liable for Corporation Tax, the penalty is based on the amount of tax that’s unpaid or that your company or organisation is liable for. This is called the potential lost revenue or PLR."

So a client who forms on 31 March 2019, pays its CT liability by 1 January 2021 and file its CT600 by 31 March 2021, not a problem.

However if you a late paying or filing on your first year, will the HMRC go for penalties especially now with the clearer letter?

Now how to respond to the letter. Either the client registers for CT online or in writing.

“You can also register for Corporation Tax in writing. Your letter must include:

  • the company’s name and registration number
  • the date the company’s accounting period started
  • the date to which the company intends to prepare accounts
  • the company’s principal place of business
  • the nature of the business being carried out by the company
  • the name and home address of each director of the company
  • if the company has taken over another business, the name and address of the former business and also the name and address of the person from whom the business was acquired
  • if the company is a member of a group of companies, the name and registered office address of the parent company
  • if the company has been obliged to comply with the Income Tax (Pay as You Earn) Regulations 2003, the date on which that obligation first arose

The letter must be:

  • signed by a company director or company secretary
  • include a declaration that the information is correct and complete to the best of their knowledge”

I am not going to do anything different. However I may warn newly formed client companies that they want to be prompt with their information as they could be subject to tax geared penalties . I don’t want to instruct clients to register for CT online and I certainly don’t want to write to the HMRC with the above information.

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18th Apr 2019 16:51

I'm not sure how you form a company and don't register for corporation tax. Whenever I set a company up the letter from HMRC just arrives on its own.

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to Duggimon
18th Apr 2019 16:59

But getting a UTR doesn't mean you've started trading.

They're separate events.

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to Duggimon
18th Apr 2019 17:20

The HMRC want all companies to tell them that "the company is within the charge of Corporation Tax". This has to be done with three months of happening. This is on the CT41G letter which HMRC send to all newly incorporated companies (per Companies House) which has the UTR on as well.

I didn't know about this until today as the new format of the HMRC UTR letter makes very clear.

If they don't hear from you they have always assumed the date of incorporation is your starting date. However I don't know if that has a legal basis or even that practice will carry on?

On personal tax the HMRC has had problems with unrequested tax returns and the legality of enquires and penalties. Maybe they are worried about CT?

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