Corporation Tax Problems

HeadInSand13 · 20 September 2007 at 3:59PM

Not quite sure if this is the right place to post this but here goes... (apologies if it's not)

Am finally pulling my head out of the sand with this after threat of imminent court action. Ever since I formed my company about 4 years ago, I have not submitted tax returns. Shortly after starting up I was hit by severe depression which I am still trying to deal with, which left me unable to cope with a lot of stuff and many letters remained unopened.

I now owe thousands of pounds in penalties to HMRC, I have to put together accounts to submit with tax returns for these missing years and I can't afford an accountant to do it for me. The company has only turned over a few thousand each year and almost none of that was profit.

I really need to get out of this mess but don't know where to begin...

I would be very grateful for any advice.

stratty · 20 September 2007 at 4:14PM

Have you been filing the relevant companies house paperwork?

Really you should prepare the accounts and submit the CT600 returns to appease HMRC, however,

It would be my advice to let the company become struck off which will happen if you dont file relevant returns at companies house.

The tax office can object to the strike off but it is rare that this happens.

silvercar · 20 September 2007 at 4:14PM

Good on you for sorting this out. If you have made little profit there should be minimal tax to pay.

I'm not sure if you mean your personal tax return or company tax returns. Either way, I wonder if there is a small business advisory service in your area that could help. Maybe your bank manager would know?

You could also phone your tax office and ask for help.

HeadInSand13 · 20 September 2007 at 4:31PM

I've submitted everything to Companies House and am now paying £100 a month to pay off THEIR penalties.

I did recently submit the CT600s for these years but had them rejected because I only attached the abbreviated accounts - trouble is I don't know exactly what I DO need to send in the way of accounts. The tax office just say to get an accountant to do them, but I really can't afford it and was hoping to be able to do them myself.

I only have until next week to get the correct returns back and even then I don't think I can hold them off any longer.

silvercar · 20 September 2007 at 6:17PM

abbreviated accounts are all that is required if your turnover is low (under £2m) ???

It seems to me that it would be cheaper to pay an accountant than pay the penalty charges. It will also mean that you can relax knowing that someone is in control.

Pennywise · 20 September 2007 at 8:33PM

silvercar wrote: »

abbreviated accounts are all that is required if your turnover is low (under £2m) ???

Unfortunately not, HMRC want the full company accounts - they won't accept the abbreviated as they really don't show much at all.

silvercar · 20 September 2007 at 8:41PM

Pennywise wrote: »

Unfortunately not, HMRC want the full company accounts - they won't accept the abbreviated as they really don't show much at all.

Not according to my accountant who has successfully submitted my abbreviated accounts for years!

See companieshouse.gov.uk or http://www.businesslink.gov.uk/bdotg/action/detail?type=RESOURCES&itemId=1073791914

for proof.

mrsS_2 · 21 September 2007 at 7:24AM

by law, you only need to send in the ct100 return- You do NOT need to send in any accounts at all to the inspector of taxes, just companies house..

revenue charged us £100 in penalties last year because the accountant just filled in the ct100 and sent in this with the computations. we had a penalty because we didnt sent in the accounts. our accountant just rang them up and asked for the statute where it says they had to be submitted and then we got a letter saying the penalty had been removed.

apparently they do this to everyone who doesnt send in the accounts but they are wrong.

get an accountant on board and get the penalties rescinded.

Bean_Counter · 21 September 2007 at 8:23AM

silvercar wrote: »

It seems to me that it would be cheaper to pay an accountant than pay the penalty charges. It will also mean that you can relax knowing that someone is in control.

This is very good advice. The accountant should be able to save you more than the cost of their fees, depending on your circumstances.

Pennywise · 21 September 2007 at 8:54AM

silvercar wrote: »

Not according to my accountant who has successfully submitted my abbreviated accounts for years!

See companieshouse.gov.uk or http://www.businesslink.gov.uk/bdotg/action/detail?type=RESOURCES&itemId=1073791914

for proof.

Your link refers to Companies House - I was talking about HMRC - as per HMRC website - http://www.hmrc.gov.uk/manuals/ctmanual/CTM93180.htm

"These are the full accounts that companies must send, on demand, to members under S239 Companies Act 1985. They are not the abbreviated accounts that some companies may send to the Registrar under S246 of that Act. "

So abbreviated accounts for Companies House, but FULL accounts including directors report etc for HMRC.

Pennywise · 21 September 2007 at 8:55AM

mrsS wrote: »

by law, you only need to send in the ct100 return- You do NOT need to send in any accounts at all to the inspector of taxes, just companies house..

revenue charged us £100 in penalties last year because the accountant just filled in the ct100 and sent in this with the computations. we had a penalty because we didnt sent in the accounts. our accountant just rang them up and asked for the statute where it says they had to be submitted and then we got a letter saying the penalty had been removed.

apparently they do this to everyone who doesnt send in the accounts but they are wrong.

get an accountant on board and get the penalties rescinded.

As per HMRC website - which does specify the relevant law requiring the accounts:-

CTM93180 - CTSA: the filing obligation: accounts to be delivered

FA98/SCH18/PARA11 (formerly TMA70/S11 (6))

A company is usually required to deliver a copy of its accounts as part of its return.

When a company is:

resident in the UK throughout the return period,

and

required under the Companies Act 1985 (or the equivalent Northern Ireland legislation) to prepare accounts for a period that coincides with or overlaps a period for which it is required to deliver a company tax return,

the accounts it is required to deliver, as part of its return, are those accounts.

Any other documents, such as directors' and auditors' reports, that the Companies Act requires the company to prepare must accompany the accounts, - see CTM93200.

These are the full accounts that companies must send, on demand, to members under S239 Companies Act 1985. They are not the abbreviated accounts that some companies may send to the Registrar under S246 of that Act.

Note: The Companies Act requirement does not extend to the preparation of a detailed trading and profit and loss account. It follows from Paragraph 11 that the notice to deliver a return does not require the company to prepare or deliver a detailed trading and profit and loss account. Most companies, however, include such an account as part of their computations ( CTM93210).

S226 and 227 Companies Act 1985 require group holding companies to prepare both individual company and consolidated accounts. A company that prepares group accounts need not disclose an individual profit and loss account, although there must always be an individual balance sheet. The accountancy profession's own standards (FRS 1) also require the company to produce a consolidated cash flow statement. (The Revenue Compliance Accountants website has a brief description of all of the accountancy standards.)

Holding companies must deliver copies of both accounts as part of the company tax return. In practice they can be combined into one document and there is no objection to this practice. However, consolidated accounts that do not also give details of the holding company's individual balance sheet and profit and loss account are not, by themselves, sufficient.

You should note that a company which is itself a parent but also a subsidiary either of;

another UK company,

or

a company incorporated under the laws of another European Union state,

need not prepare group accounts provided the ultimate parent's consolidated accounts are publicly available in English.

Under FA98/SCH18/PARA3 (2) (formerly TMA70/S11 (8)) a notice may require different information, accounts, statements and reports in relation to different types of company.

FA98/SCH18/PARA11 does not cover companies not resident but carrying on a trade through a branch or agency in the UK (see CTM93250).

Corporation Tax Problems

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