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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4886
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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, I have a registered Ltd in uk and a branch of this ltd

Resolved Question:

Hi, I have a registered Ltd in uk and a branch of this ltd in another EC country , in which we registered for taxes of that country. How do we do accounts? Do both ; ltd and a branch should have the same accounting period? as financial year differ in two countries.
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.
Hello and welcome to the site. Thank you for your question.

You will have to prepare accounts for both the LTD company in the UK and the Branch in another EU country. They can have different accounting periods but it is normally good practice to adopt co-terminus accounting period end (both having same year end). Accounts of the UK LTD company will be submitted at Companies House and filed with HMRC and the accounts for the branch filed with local tax authorities in the country of operation.

Under the new rules introduced in 2011, a UK company has the option of making an election such that all profits of non-UK branches would be exempt from Corporation Tax in the UK. Similarly, any losses of non-UK branches would not be available for offset against profits of the UK company. These rules do not apply to profits and losses of a company whose business constitutes primarily investment activities.

I hope this is helpful and answers your question.


If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.


Customer: replied 2 years ago.

Thanks, ***** ***** need to include any figures and amounts of branch profit or loss in my annual accounts and CT600?

Expert:  taxadvisor.uk replied 2 years ago.
Gerard, thank for your reply.

Once you have made an election as mentioned in my previous posting, the exemptions applies and you do not have to include figures and amounts of branch profit or loss in your annual accounts and CT600 return.

This is what the new legislation says ....

A UK company with a non-UK branch (or branches) must opt into the regime by making an election. There is a cooling off period, which ends on the filing date for the tax return for the first accounting period in which the exemption will have effect, following which the effect of the election is permanent.

I hope this is helpful.

Customer: replied 2 years ago.

Hi, so why is it a good practice to adopt co-terminus accounting period end (both having same year end). Thanks.

Expert:  taxadvisor.uk replied 2 years ago.
Gerard, thanks for your reply.

Normally companies with operations in different countries (subsidiaries etc) keep accountindg dates the same for ease on consolidation of accounts. It is easier to arrange audits etc.

You don't have to keep same year ends as you don't have to include the results of your overseas branch when reporting results of UK LTD Company.

I hope this is helpful.
Customer: replied 2 years ago.

Can the branch use LTD vat registration for activities when trading in EU?

Expert:  taxadvisor.uk replied 2 years ago.

Gerard, thank you for your reply.

This question is outside and not related to your original question. You should put fres question as per JustAnswer rules.

I will answer on this occasion only .. No you can't use the LTD VAT registration for activities undertaken by it from within a different EU country.

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

taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4886
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
taxadvisor.uk and other Tax Specialists are ready to help you
Expert:  taxadvisor.uk replied 2 years ago.
I thank you for accepting my answer.

Best wishes.

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