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TonyTax
TonyTax, Tax Consultant
Category: Tax
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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Tony. My company is now dormant but ran 18 month

Customer Question

Hi Tony.
My company is now dormant but ran for an 18 month period.
if I take the whole 18 months the CT due is £57k.
I've worked on a cash basis and my CT returns are
first 12 months trading £65k
6 dormant months -£8k
do i just pay £57k or do i pay £65k and then wait for a refund?
Thanks
James
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi.

Can you tell me the date of incorporation of the company please.
Customer: replied 1 year ago.

incorporated 12th sep 2013, so corp period looking on my HMRC account is

12th sep 2013 to 30th sep 2014.

then presume will do 1st oct 2014 to 30th apr 2015.

thanks

Expert:  TonyTax replied 1 year ago.
Thanks.

Leave this with me while I draft my answer.
Expert:  TonyTax replied 1 year ago.

Hi again

Whilst your company is dormant, it still exists and unless you inform HMRC of its current status, you will continue to be required to submit a corporation tax return within 12 months of the end of the accounting period, 30 September.

Corporation Tax is assessed for financial years, ie the year to 31 March. You will need to submit a corporation tax period for the period 12 September 2013 to 30 September 2014 by 30 September 2015, though the corporation tax will be payable on 1 June 2015, nine months and one day after the end of the accounting period.

You will also need to submit a corporation tax period for the period 1 October 2014 to 30 September 2015 by 30 September 2016, though the corporation tax will be payable on 1 June 2016, nine months and one day after the end of the accounting period.

Each set of accounts and corporation tax return should only include the profit for the respective period. You will be able to claim tax relief for the second year loss if there is one against your first year profit.

If you are unsure about whether you will need to submit returns for completely dormant periods, call the corporation tax helpline on the number here and tell them what your situation is. They will probably mark the record as dormant which will stop the issue of corporation tax returns but you must tell them if the company becomes active again.

I hope this helps but let me know if you have any further questions.

Customer: replied 1 year ago.

thanks Tony,

so to confirm by tax relief you mean what exactly?

will i need to pay the £65k for year 1 and then for year 2 I will get a refund?

Expert:  TonyTax replied 1 year ago.

You need to pay your year 1 CT by 1 July 2015 (not 1 June 2015 as previously stated. You will then normally back date any loss you make in year 2 to get some of the CT paid for year 1 back.

However, you can claim the year 2 loss in advance by following the instructions here. The CT600 return form is here. Such a claim would mean you would get credit for the second year loss earlier and only pay the overall CT due for both periods on 1 July 2015.

If there was a CT liability for year 2, it would be payable on 1 July 2016 (not 1 June 2016 as previously stated).

Expert:  TonyTax replied 1 year ago.
Hi again.

It's been a few days since I answered your question. Is there anything you need further clarification on?

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