Did you form a company in March but due to the Coronavirus you could not trade immediately? You may be wondering do you need to notify HMRC and will it have a delay on the company’s tax return?
It is quite common for companies to be formed but the business does not begin immediately. Often the gap is a mere few days but sometimes its far longer. This can often cause confusion about what you should tell HMRC and how it affects the corporation tax (CT) position. The key point to remember is that while accounts for CT purposes and returns are related, the requirements to submit is different.
When are accounts required?
HMRC will only require accounts for periods when your company is “active”. For example where…
· Has business activity such as a trade even if it hasn’t made any sales
· Has a bank etc, account which generates interest, even if none have been received yet
· Manages investments; or
· Receives any other income
When is a Corporation Tax return required?
You will only need to submit a CT return for you company if
· A CT accounting period exists; or
· HMRC has issued a notice asking for one, even if the company is inactive.
HMRC usually asks for a corporation tax return for the twelve months from the date the company was formed.
Companies House and HMRC don’t always assume the same dates so it is sensible to ensure the dates are the same.
If the company was dormant and then became active tell HMRC and they may let you off sending a return for the dormant period.
Should you have any questions please do not hesitate to contact us on (01509) 816150 or by the contact form at the bottom of the page.
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