tax advice plus accountant sought

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greenglaze

Free Member
Mar 10, 2008
22
0
  • #1
    [FONT=Times New Roman, serif]Hi,[/FONT]
    [FONT=Times New Roman, serif]I formed a limited company to trade on the internet on 28th April 2008.[/FONT]
    [FONT=Times New Roman, serif]I was advised by the tax office to register for corporation tax as even though I was not yet trading I was buying stock and therefore the company was not dormant[/FONT]
    [FONT=Times New Roman, serif]The company actually 'opened for business' on 19th September 2009. [/FONT]
    [FONT=Times New Roman, serif]I have since been advised informally by an accountant that I should not have registered for tax so soon.[/FONT]
    [FONT=Times New Roman, serif]Anyway I have two corporation tax returns in my in-tray (28th April 2008 - 27th April 2009 and 28th-30th April 2009) which cover my company's first year's accounting period – although though there was no trading activity during that period - and which have to be completed by January 2010 [/FONT]
    [FONT=Times New Roman, serif]Could any accountant advise:[/FONT]​
    1. [FONT=Times New Roman, serif]Should I simply get the returns filled in and sent back?[/FONT]​
    2. [FONT=Times New Roman, serif]Should I try and tell the tax office I registered too soon and try and register instead from 19th September 2009?[/FONT]​
    3. [FONT=Times New Roman, serif]The company is unlikely to show any significant profit for a couple of years. I'm in it for the long term. However I'm going to need at least a skeleton accounting service over the next few years. Are there any accountants there willing to give a quote for filling in corp. tax return if I collate all the info – receipts, expenses etc. I'm in the East Midlands – Derby, Lichfield, Birmingham area however of course it could all be done by e-mail and post. This might suit someone setting up as an accountant.[/FONT]​
     
    gouldie0

    gouldie0

    Free Member
    Jan 25, 2009
    299
    43
    East Lothian, Scotland
  • #2
    Hi,

    I'm assuming if you were on buying stock for the purpose of starting up, that you wouldn't have generated much of a profit to pay corporation tax on? Were you trading i.e. generating any sales at all?

    Now that your registered i would assume that it would be difficult to convince the powers that be (HMRC), that you registered to early. If you have all the information, submit the returns and move forwards with your business.

    Kind Regards

    Neil
     
    Upvote 0
    MikePage

    MikePage

    Free Member
    Jun 11, 2007
    158
    33
    Bristol
  • #4
    This example highlights an irritation with the way that Comapnies House and HMRC combine to make life a little more complicated than it need be.

    Companies House will, by default, set a Company's Accounting Reference Date (ARD) - other wise referred to as it's year end - at the end of the month a year from incorporation. Thus the first years accounts become one year plus X days.

    HMRC say it does not want a Corporation Tax Return to cover a period greater that 12 months. Thus NewCo tends to get a reminder that it is due to submit two tax returns (CT600s) which is both irritating & cofusing.

    Don't forget that you can change the Company's ARD http://www.companieshouse.gov.uk/about/gbhtml/gba3.shtml#one

    Thus shorten year one to 11 moths plus X days; also consider wether there is an optimum month to select as a year end based on how busy the business is, stock levels Etc.

    Regards

    Mike
     
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    D

    David Griffiths

    Free Member
    • Jun 21, 2008
    11,553
    3,669
    Cwmbran
  • #5
    MikePage said:
    Thus NewCo tends to get a reminder that it is due to submit two tax returns (CT600s) which is both irritating & cofusing.
    Click to expand...


    That's simply dealt with by informing HMRC that the company didn't start trading until the first day of the following month. They don't issue returns for periods that the company isn't trading.

    There aren't that many companies that incorporate and trade from the same day.

    That enables you to keep the original ARD if that's what you want.

    Either way, of course, you have to take the action early or HMRC will set up the two accounting periods by default. Unfortunately most people who incorporate companies themselves don't have a clue about this and make life more complicated for themselves than necessary.
     
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