28th February 2014
Every year, HMRC issues a notice to file to companies. In most cases, the return must be submitted to HMRC within 12 months of the end of the accounting period. If you are not sure about it, give us a call on 01332 813380 and we can advise you.
Companies must file their corporate return online. Their accounts and computations must also be filed in the correct format – inline eXtensible Business Reporting Language (iXBRL).
Unincorporated organisations and charities that don’t need to prepare accounts under the Companies Act can choose to send their accounts in iXBRL or PDF format. However any computations must be sent in iXBRL format.
Penalties apply for late submission of the return of £100 if it is up to three months late and £200 if the return is over three months late. Additional tax geared penalties apply when the return is either six or twelve months late. These penalties are 10% of the outstanding tax due on those dates.
The return required by a Notice to file contains the company’s self assessment, which is final subject to:
The company has a right to amend a return (for example changing a claim to capital allowances). The company has 12 months from the statutory filing date to amend the return.
HMRC have nine months from the date the return is filed to correct any ‘obvious’ errors in the return (for example an incorrect calculation). This process should be a fairly rare occurrence. In particular the correction of errors does not involve any judgement as to the accuracy of the figures in the return. This is dealt with under the enquiry regime.
Under CTSA, HMRC check returns and has an explicit right to enquire into the completeness and accuracy of any tax return. This right covers all enquiries, from straightforward requests for further information on individual items through to full reviews of a company’s business including examination of the company’s records.
The main features of the rules for enquiries under CTSA are:
HMRC have the power to make an assessment (a ‘discovery assessment’) if information comes to light after the end of the enquiry period indicating that the self-assessment was inadequate as a result of fraudulent or negligent conduct, or of incomplete disclosure.
Summary of self-assessment process. Example:
A company prepares accounts for the 12 months ended 31 May 2014 and submits the return by 31 December 2014.
Key dates under CTSA are:
01.03.15 Payment of corporation tax
31.05.15 Deadline for filing the return
31.12.15 End of period for HMRC to open enquiry (being 12 months from the date the return was actually filed)
On 31 December 2014 the company tax position is finalised subject to HMRC’s right to make a discovery assessment in some circumstances.
Payment of tax
There is a single, fixed due date for payment of corporation tax, nine months and one day after the end of the accounting period (subject to the Quarterly Instalment Payment regime for large companies).
If the payment is late or is not correct, there will be late payment interest on tax paid late and repayment interest on overpayments of tax. These interest payments are tax deductible/taxable.
If a company pays tax before the due date, it receives credit interest on amounts paid early. Any interest received is chargeable to corporation tax.
If a close company makes a loan to a participator (for example most shareholders in unquoted companies), the company must make a payment to HMRC if the loan is not repaid within nine months of the end of the accounting period. The amount of the tax is 25% of the loan. This tax is included within the CTSA system and the company must report loans outstanding to participators in the tax return.
RDG Accounting are Accountants in Castle Donington, Derby who provide professional Accounting solutions for business and individuals in Derby, Long Eaton, Leicester, Nottingham and Ashby. To book a FREE Initial Review meeting, call us on 01332 813380 or email firstname.lastname@example.org
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