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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 5028
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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We are a Startup, just launched. We have a company registered

Resolved Question:

We are a Startup, just launched. We have a company registered in UK which has not filed any corporation tax returns so far. We have our Accounts submission due date July 2015 and financial year end December. We formed the company in the year 2013.
We have few questions at the moment:
- Do we have to intimate HMRC about the status of the company as it has become active.
- Do we need to submit 2 corporate tax returns:
* 1st Return for the period starting from Company Registration – Company Active date.
* 2nd Return for the period starting from Company Active date – Financial year end.
If our above mentioned assumptions are correct, When we should submit corporate tax returns to HMRC.
Submitted: 3 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 3 years ago.
Hello and welcome to the site. Thank you for your question.

[q]
- Do we have to intimate HMRC about the status of the company as it has become active.

[a]
It is advisable to intimate HMRC about the company status.

[q]
- Do we need to submit 2 corporate tax returns:
* 1st Return for the period starting from Company Registration – Company Active date.
* 2nd Return for the period starting from Company Active date – Financial year end.

[a]
If the company is dormant and it is noted accordingly at HMRC records, then you don't have to submit a return to cover period company was not trading.

Your return would cover period from start of business date to accounting period end as the return can't be for a period longer than 12 months.

If our above mentioned assumptions are correct, When we should submit corporate tax returns to HMRC.

If your first accounting date is 31 Dec 2014 then first CT600 return is due no later than 31 Dec 2015.

I hope this is helpful.
Customer: replied 3 years ago.

Hi, Thanks for your response. I have just seen the company's status and it is active since its incorporation date which is October 2013 and the financial year end is 31/12. Kindly suggest now. Have we missed filing corporation tax Returns in December 2013?

Or we still have an option and we have to submit our first CT600 by 31st December 2014 for the period Oct 2013 - Dec 2013.

Expert:  taxadvisor.uk replied 3 years ago.
Domenico, thank you for your reply.

This is a practical solution -
If the company was not trading when it was first formed and started activity say in year 2014, then you should write to HMRC and advise the company was dormant until say 31 Dec 2013 and they will update the records and you won't have to file CT600 return for that initial period.

Your year end is 31/12 and the first set of accounts would be to 31/12/2014 and due date for filing CT600 would be no later than 31/12/2015.

If you were to prepare accounts to 31/12/2013 and then annually to 31/12 then you would have to file two CT600 returns one to 31/12/2013 (due no later than 31/12/2014) and then for 12 months to 31/12/2014.

I hope this is helpful.
taxadvisor.uk and other Tax Specialists are ready to help you
Customer: replied 3 years ago.

Thanks very much.

Another question, Just checked at companies house. The Accounts filing due date is July 2015 whereas financial year end is 31st December. Even if we request HMRC that we were dormant from Oct 2013 (inception date) to September 2014 and they agree.

In this case, we have to submit CT600 firstly for the period between Sep 2014 (Active date)- Dec 2014 (Financial year end) and due date for filing should be Dec 2015. Am I correct.

Expert:  taxadvisor.uk replied 3 years ago.
Thank you for your reply.

You are correct in that once HMRC has updated their records to show company status as dormant (inception date to Sep 2014), then your first CT600 return would cover period to 31 Dec 2014.

Many thanks
Customer: replied 3 years ago.

The thing which we are worried about is that, if we update the company status till September 2014 as dormant, we will not require to file CT600 for that period . Now, how can we claim tax losses which we suffered during Oct 2013 - Sep 2014 because we spent money in terms of say Marketing, web hosting etc and capital allowance on computer equipment etc.

If you can guide please. Thanks

Expert:  taxadvisor.uk replied 3 years ago.
Domenico, thank you for you reply.

Based on information now provided, you can't say the operation was dormant till Sep 2014. You should produce accounts from inception and show these items of expenditure notwithstanding the fact there was no income in the initial months.

I hope this is helpful.
Customer: replied 3 years ago.

Hi,

Can you please guide a bit more :)

- Since the company was registered in October 2013 and year end is 31st december, since the company status is active since then, it seems that payment of our corporation tax is due by tomorrow.

- Do we have to write HMRC first to update their records and keep the company status dormant from its beginning till September 2014 or otherwise intimate them first that we have not made any money since then and no tax payment is due and apply for updating company status later.

Expert:  taxadvisor.uk replied 3 years ago.
Domenico, if the accounts are for the period to 31 Dec 2013 and there is a profit in that period, then you are right in that tax on those profits is due no later than tomorrow.
If on the other hand, there was no profit then when you file your CT600 return it would show no profit and no CT payable and in this case you don't have to pay any CT by tomorrow's deadline.. Send the slip back with zero payable.

If on the other hand, you did not start trading until Sep 2014 then you should write to HMRC and say the company was dormant for the period Oct 2013 to Aug 2014 and request they update their records accordingly.

I hope this is helpful
Customer: replied 3 years ago.

Thanks

Customer: replied 3 years ago.

I am going to rank this service best. but what is the best way to write to HMRC, email or letter?

Expert:  taxadvisor.uk replied 3 years ago.

Domenico, your best approach is to drop a short letter to HMRC as I don't think they take these instructions on the phone or by email.

Keep it simple and to the poin...
Wishing to advise you the company was dormant for the period [xxxx to xxxxx].
The first set of accounts would be for the period [xxxx to xxxx].
Please update your records.

If you are happy and there are no more issues I will appreciate if you would kindly rate the service I provided to ensure I get credited for it.