Corporation tax - Chapter 7 - 10 - CTSA and Penalties Flashcards
(20 cards)
What are the key notification of chargeability dates?
On first coming in to the charge of CT a company must notify HMRC within 3 months of the start of it’s AP.
If no notice (CT603) is received, the company must notify HMRC within 12 months of the end of the AP.
What are the key tax return filing dates?
The tax return (CT600) and financial statements must be submitted to HMRC by the later of:
- 12 months after the end of the AP; or
- 3 months from the receipt of the filing notice (CT603).
What are the key dates to amend/correct a return?
By HMRC - 9 months from date of receipt
By Company - 12 months from the due filing date
What are the key enquiry dates?
If the return is filed on time:
- For small groups - 12 months from actual filing date
- For large groups - 12 months from due filing date
If the return is filed late:
- 12 months from next quarter day following the late filing (31 Jan, 30 April, 31 July or 31 Oct)
How long must a company keep records for?
6 years from end of the AP
When do HMRC have the right to raise discovery assessments?
- If the loss of tax was brought about carelessly or deliberately by the company; or
- HMRC have not been provided with sufficient information to allow them to make a correct assessment of the company’s profits.
s.18, para 41 - 46, FA 1998
What are the time limits for HMRC to make a discovery assessment?
- General rule is 4 years from end of AP
- For cases involving carelessness - 6 years from end of AP
- For cases that are delibrate - 20 years from end of AP
When is a company small/medium and what is the CT due date?
Augmented profits < £1.5m
CT due 9 months and 1 day after end of AP
When is a company large and what is the CT due date?
£1.5m < Augmented profits < £20m
Payable via QIPs, due date are as follows:
- 1st payment - 14th day of month 7 from start of AP
- Further instalments - 3 months after previous instalment
- Final instalment - 3 months & 14 days after end of AP
When is a company very large and what is the CT due date?
Augmented profits > £20m
Payable via QIPs, due date are as follows:
- 1st payment - 14th day of month 3 from start of AP
- Further instalments - 3 months after previous instalment
- Final instalment - 14th day of final month of AP
What is the exception for a large company to avoid paying QIPs?
If profits are less than £10m and the company was not large or very large in the previous AP then they will not be required to pay by instalments
What is the penalty for failure to notify chargeability?
The penalty is charged as a % of the amount of unpaid CT 12 months after the end of the AP.
Maximum, minimum unprompted and minimum prompted penalties are shown below:
Delibrate and concealed - 100%, 30%, 50%
Delibrate but not concealed - 70%, 20%, 35%
Any other case - 30%, 0% < 12 months < 10%, 10% < 12 months < 20%
What are the penalties for late tax returns?
- Immediate £100 penalty when late
- Additional £100 penalty when more than 3 months late
- Tax-geared penalty of 10% of unpaid tax if return is not filed within 18 months of the end of the AP
- Tax-geared penalty of 20% of unpaid tax if return is not filed within 24 months of the end of the AP
What are the penalties for incorrect tax returns?
The penalty is charged as a % of lost revenue.
Maximum, minimum unprompted and minimum prompted penalties are shown below:
Delibrate and concealed - 100%, 30%, 50%
Delibrate but not concealed - 70%, 20%, 35%
Careless - 30%, 0%, 15%
Note: Penalty for careless error may be suspended for 2 years.
How can a penalty for failure to notify chargeability, late returns and incorrect returns be avoided?
If there is a reasonable excuse or can be reduced if special circumstances apply
When is the penalty due for failure to notify chargeability, late returns and incorrect returns?
Within 30 days of the assessment being raised
What is the penalty for failure to keep/preserve records?
Penalty of £3,000 per AP applies where there is a failure to keep/preserve records for 6 years from the end of the AP
What is the penalty for failure to provide documents upon enquiry?
Initial penalty of £300
If failure continues, further penalties up to £60 per day
Are there any penalties for late payment of CT?
For companies that do not pay instalments, no penalties are chargeable just interest
For companies that do pay instalments, a penalty up to twice the amount of interest is chargeable if HMRC can prove the company delibrately or recklessly failed to pay the correct amount on the instalment date
When is a company considered to have made a disclosure to HMRC?
If the company tells HMRC about the failure, gives reasonable help in quantifying the tax unpaid and allows HMRC access to records
