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Will a co limited by guarantee receive a CT603?

Will a company limited by guarantee receive a CT603? Are rules same as for co limited by shares?

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Hi, hoping someone can help please as have not been able to find clear guidance elsewhere - apologies if I have missed an obvious source.

(New) client is a company limited by guarantee, formed 5 years ago (to own a freehold) and no trading activitiy until recently.  They have recently started to receive a small trading income and now need to file a tax return.  Director insists he has never received a CT603 (notice to file tax reutrn) or had correspondence to or from HMRC to confirm the company is dormant and did not need to file a tax return.   Director has not informed HMRC that the company has started trading.

a) Can this be correct?  My understanding it the only difference for accounts and tax between a company ltd by guarantee and a company ltd by shares is simply that - both have members, but a company limited by guaranteee has no shares, instead members provide a guarantee of their liability to the company, often £1.  Otherwise the regulatory and compliance framework is the same, and so as a matter of course, HMRC will have sent a CT603 to the company as part of registration of the company - is my understanding correct please?

b) Director should of course have let HMRC know within 90 days that the company is trading, are there any penalties for not doing so?

Many thanks

 

 

Replies (7)

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Scalloway Castle
By scalloway
29th Jun 2018 14:27

a) HMRC will only ask for a Corporation Tax return if they are told that the company is trading.

b) I can find no mention of a penalty. I suspect this is only for HMRC's convenience.

Thanks (1)
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By Sharyn80
29th Jun 2018 15:20

Thanks scalloway, just to double check I've understood, HMRC will have been advised that the company has been incorporated by Companies House - same as any other company.

The bit I am unclear on is whether, in the case of a company limited by guarantee, HMRC don't send their standard CT603? I'd thought the default was a tax return is expected from all companies unless they advise HMRC they are dormant.

Is that not the case for a company limited by guarantee?

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Replying to Sharyn80:
Scalloway Castle
By scalloway
29th Jun 2018 15:35

For any company HMRC will only ask for a tax return if they have been informed that the company is trading. They will not do it automatically.

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By Exector
29th Jun 2018 15:43

For ALL new companies, HMRC will issue a CT41G, which will give an opportunity to advise if co is active or dormant, but default position if HMRC not advised otherwise , is to set up the co with live APs, again in the absence of any other info coming in from co/agents, running from DoI for 12m/ accounting date & annually thereafter, tho revised as & when any alternative APs advised & with pot suspension of returns if accepted a co will be inactive. Until such a point is clarified, CT603s (notices to file) will be issued shortly after the end of each live AP on their record.
HMRC may well not be aware a given co is ltd by guarantee and after all that is not per se, a status which confers an exemption from pot CT charge. It is a question of fact whether it will receive any taxable income or gains.

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By Sharyn80
29th Jun 2018 15:48

thanks both - that clears it up much appreciated

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By Exector
29th Jun 2018 16:02

Just to add re comment on late notification, which I missed. There is a 3 month time limit specified to notify commencement of trading and there is a potential statutory penalty, but in practice I have never known HMRC pursue this, providing notification is not made very late & actually made in time to ensure timeous tax payment & return filing

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RLI
By lionofludesch
29th Jun 2018 16:24

To be fair, a lot of folk claim they've never had letters from somebody or other.

I once had a bloke say he'd never had a tax return for a particular year. I pulled it out of the papers he'd just given me and held it up for him to see.

He said "Oh."

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