A client ceased trading on 31 December and I have prepared the accounts, deregistered for VAT and have the corporation tax figure ready to pay. A liquidator has been appointed for a solvent liquidation. The year end isn’t until February but the liquidator said I don’t need to submit accounts to Companies House.
Does anyone know what I submit to HMRC? Do I change the year end to 31 Dec at CH or just submit accounts and CT600 to HMRC to 31 Dec? What reference does the client use to pay the corporation tax?
Thanks for any assistance.
Replies (18)
Please login or register to join the discussion.
File nothing at Companies House.
File CT600 with some rudimentary accounts to HMRC. The CAP is from last year end (presumably 1 March 2019) to cessation of trade. They'll accept a pdf if you tick the right boxes on the front page.
But there won’t be an accounting period since I have not written my usual letter to HMRC about the cessation of trade since it is a liquidation.
Shall I just file and then call up and get them to set up the AP?
What ???
That's not how CT works. It's not like VAT.
Each accounting period has a separate reference and in my experience unexpected tax is repaid by cheque. So I need a reference. Further to the advice below, no tax payment will be made until advised by the liquidator, I will just advise the client the amount. I still don’t know what date to draw up the accounts to so can’t file the CT600 in any case.
Cessation of trade starts a new chargeable accounting period.
Yes. One to the date of cessation then one to the date of liquidation.
The planning trap is you can't carry forward trading losses against capital profits made as the business is wound up.
Thanks Lion. So I file the CT600 to 31 Dec and then it will appear on HMRC with a reference so my client can pay the tax. I know I am being pedantic but I really wanted it off my desk this week and then the client deal with the liquidator. Noted that I will have to file the nil CT600 but won’t be for a while.
Yes. I'm sure I've changed dates on CT600s before now.
Thanks Lion. So I file the CT600 to 31 Dec and then it will appear on HMRC with a reference so my client can pay the tax. I know I am being pedantic but I really wanted it off my desk this week and then the client deal with the liquidator. Noted that I will have to file the nil CT600 but won’t be for a while.
Yes. I'm sure I've changed dates on CT600s before now.
Thanks Lion. So I file the CT600 to 31 Dec and then it will appear on HMRC with a reference so my client can pay the tax. I know I am being pedantic but I really wanted it off my desk this week and then the client deal with the liquidator. Noted that I will have to file the nil CT600 but won’t be for a while.
Yes. I'm sure I've changed dates on CT600s before now.
You won't file anything with C House as the Declaration of Solvency replaces the need to file returns with C House.
The Liquidation will also create a new tax year end date and you will need to submit any final returns to the date of Lqn with HMRC so that the Liquidator can obtain HMRC's clearance.
I'm surprised the Liquidator hasn't explained this?
Usually I recommend the accountants hold off filing anything until post Liquidation so you then have the new tax date to work to.
You could send everything off in advance but will then have to do another return for the hiatus period to the date of Lqn...
The Company could still make a payment on account of the anticipated tax in order to reduce interest which will become payable from the date of the MVL (regardless of the fact the tax is being paid early but note that the Liquidator can often claw this interest back by submitting subsequent documents to HMRC)
What's the Company's year end and what is the expected date of the MVL?
The reference will not change.
Options:
1. Submit returns to Feb then subsequently submit another return from 1st March to date of MVL.
2. Wait for MVL then submit one return to date of MVL.
You will no doubt need to calculate the taxes anyway for the Declaration of Solvency figures.
Liquidator should ensure you are paid for any extra work involved.
Usually I recommend the accountants hold off filing anything until post Liquidation so you then have the new tax date to work to.
How is the tax paid after the liquidation is complete ?
Tax is either paid by the Company on account pre Liquidation, or the Liquidator will arrange to pay it before closing the MVL.