Chapter 4 Corporation Tax Self-Assessment Flashcards
4.1 Introduction
Corporation tax for smaller companies is due 9 months and one day after the end of the accounting period. Larger companies pay by installments. The CTSA regime also deals with tax returns (CT600) which a company submits with a set of iXBRL accounts and computations. Submissions are done online.
4.2 Duty to notify chargeable
Companies have a duty to notify HMRC when their first accounting period begins or when they come back into charge. They must give written notice within 3 months of the start of the accounting period. No failure to give notice arises where the company has a reasonable excuse, as long as notice is given in a reasonable time for the excuse.
4.3 CT603
When HMRC are aware that a company is chargeable to UK CT they send out a CT603 notice requiring them to submit a corporation tax return within a few weeks of the end of the period of account. Until this notice is given the company does not have an obligation to file a return. When a company has not received a notice, it must notify HMRC within 12 months of the end of the accounting period.
4.4 Filing of return
The CT600 must be submitted by the later of:
• 12 months from the end of the period of account
• Three months from the receipt of the filing notice (CT603)
4.5 Long periods of account
Where the company makes it accounts for more than 12 months, it splits its period of account into two APs for the purposes of calculating the tax payable. For filing purposes there is a single filing date which is 12 months from the end of the period of account. Two returns will be submitted but the due date for filing both of these returns is the same.
4.6 Amendments
HMRC have nine months from the actual filing date to amend the return and the company has 12 months from the due filing date to amend it. HMRC will amend obvious errors or anything they believe to be incorrect in light of the information available to the officer. The company may amend for minor adjustments.
4.7 Enquiries
The deadlines for HMRC to start an enquiry are:
• For individual companies and small groups – 12 months from the day after the return is received, assuming the return is not late
• For large groups, 12 months from the due filing date, assuming the return is not late
• For late returns, 12 months from the quarter day following the actual filing date
4.8 Duty to keep and preserve records
Must keep records to allow it to file a correct and complete return for 6 years from the end of the period for which the company is required to deliver a tax return. The records can be required to be kept longer until either:
• The date of an enquiry into the return is completed
• If there is not enquiry the date HMRC can no longer enquire into the return
The records that must be kept are:
• All receipts and expenses arising in the course of the company’s activities and details of the matters to which they relate
• All sales and purchases for a company dealing in goods
4.9 Discovery Assessments
HMRC can make this if they discover that:
• An amount ought to have been assessed has not
• An assessment is or has become insufficient
• Relief has been given which is or has become excessive
Where a company has delivered a return for an accounting period, no discovery assessment may be made for that period unless:
• The loss of tax was brought about carelessly or deliberately, or
• The HMRC officer could not have reasonably have been expected on the basis of the information they had available to them at the time, be aware of the facts giving rise to the loss of tax
The time limit for a discovery assessment depends on the reason for the incomplete disclosure by the company. The general rule if four years from the end of the accounting period. The time limit for cases involving carelessness is six years and for those involving deliberate action is 20 years.
