23 Tax administration for a company

Question 1

When do companies need to submit a corporation tax return?

Answer 1

Within 12 months after the end of the period of account or three months after the notice

Question 2

When do companies need to pay corporation tax?

Answer 2

Within 9 months and 1 day after the end of the accounting period

Question 3

Who needs to tag accounts? iXBRL

Answer 3

The items to be tagged are those which appear in ‘taxonomies’. HMRC has published minimum tagging lists for UK GAAP, UK IFRS and corporation tax computation taxonomies.

Question 4

When must a company inform HMRC they are liable to corporation tax?

Answer 4

Within three months of its first accounting period

Question 5

What is the time limit for notifying HMRC of chargeability?

Answer 5

12 months from the end of the accounting period in which the liability arises.

Question 6

What sort of records must companies keep?

Answer 6

All receipts and expenses
All goods purchased and sold
All supporting documents relating to the transactions of the business, such as accounts, books, contracts, vouchers and receipts.

Question 7

How long must records be kept for?

Answer 7

Later of 6 years after the end of the accounting period, date on which compliance check is completed and the date on which it becomes impossible for a compliance check to be starter

Question 8

When will HMRC correct errors?

Answer 8

within nine months of the date that the return is filed with them.

Question 9

When can a company amend its return till?

Answer 9

Within 12 months of the filing date

Question 10

When can a claim for overpayment relief be made?

Answer 10

Within four years of the end of the accounting period to which it relate

Question 11

When is the payment deadline for companies that are not large?

Answer 11

Nine months and one dat

Question 12

When is the payment deadline for large companies?

Answer 12

By quarterly instalment payments

Question 13

What is the definition of a large company?

Answer 13

Profits more than 1.5 million

Question 14

What are augmented profits?

Answer 14

Total taxable profits plus dividends received from non-group companies

Question 15

What is a 51% subsidiary?

Answer 15

A company where more than 50% of the ordinary share capital is directly or indirectly owned.

Question 16

What companies are are excluded from being apart of the 51% group companies?

Answer 16

Dormant companies

Question 17

What happens when a company joins or leaves the 51% group?

Answer 17

If they join they are deemed part of the group from the beginning of the following accounting period.

If they leave they are deemed to be a part of the group until the end of the current accounting period.

Question 18

What are payment instalments based on?

Answer 18

They are based on the expected corporation tax liability for the current account period.

Question 19

When are payment instalments due?

Answer 19

By the 14th day in months 7, 10, 13 and 16 following the start of the accounting period

Question 20

What are the two types of interest?

Answer 20

Late payment interest - 3% p.a.

Repayment interest - 0.5% p.a.

Question 21

When is late payment interest run from?

Answer 21

The normal due date to the payment date.

Question 22

Is interest paid on corporation tax to HMRC a deductible expense?

Answer 22

Yes

Question 23

When does repayment interest run from?

Answer 23

The later of the due date or the date of actual repayment to the date of repayment.

Question 24

What are the penalties for late filing of a corp tax return?

Answer 24

Within 3 months of filing - £100

More than 3 months - £200

6 - 12 months - additional 10% of tax outstanding 6 months after filling date

More than 12 months - additional penalty to 20%

Question 25

What are the penalties for failure to keep and retain required records?

Answer 25

Up to £3,000 per accounting period

Question 26

What must HMRC do before commencing a compliance check?

Answer 26

Must provide written notice.

Question 27

What can HMRC demand a company produce?

Answer 27

• Documents
• Accounts
• Other written particulars
• Full answers to specific questions

Question 28

When must a compliance check must be done by?

Answer 28

12 months after the actual submission date

Question 29

If a company becomes large during an accounting period, they do not need to make payments until?

Answer 29

They reach 10 million

They was not a large company in the previous accounting period.

Question 30

Dividends from what group is not included?

Answer 30

51% group

Question 31

When are instalments never due?

Answer 31

When below £10,000