Company tax return trouble
Tax cuts. A fall in Corporation Tax (CT) rates is always welcome news for companies but the Taxman is less keen as it lumbers him with extra work in updating his online systems and programs. Despite having advance warning of the CT rate changes, the Taxman has recently issued a statement saying that because his software won’t be updated until sometime in October (he doesn’t give an exact date), some companies will have to delay submitting their self-assessment CT returns.
Is your company affected? The good news is that where your company’s last financial accounting period ends on or before March 31 2011, it won’t be affected by the Taxman’s software trouble. This is because the new CT rates (20% for trading companies with annual profits up to £300,000 and 26% for others) only apply to profits arising after that date. This means you can go ahead and submit a tax return at any time without the fear of it being rejected or resulting in incorrect tax demands.
Tax return deadlines. The deadline for submitting company tax returns, which must now only be done via the Internet, is one year following the end of your company’s financial year. Therefore, as long as the Taxman’s software is updated in line with his recent announcement, you shouldn’t have any trouble meeting the submission deadline.
Early returns. It’s already been pointed out by some tax experts thathaving to delay the submission of a CT return until after October could be more than just an inconvenience for some companies. For example, where you’re selling your company and need to confirm tax liabilities before the sale can go ahead.
Tip. Where you want to submit a CT return before October, and it covers a period after March 31 2011, you should contact the tax office which deals with your company’s tax affairs. We understand from the Taxman that he’ll be able to confirm your computation of tax liabilities and issue you with a statement to that effect.
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