Corporation tax fine for one day?

Discussion in 'Accounts & Finance' started by Dynumo, Feb 25, 2015.

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  1. Dynumo

    Dynumo UKBF Regular Free Member

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    In what seems to me one of the latest hmrc scams to be directed my way, HMRC want me to pay a £200 fine for not completing accounts for the period 31st Oct 2013 - 31st Oct 2013.

    I completed my accounts up to 30th October 2013 because that is the date I was told to do them up to, and I was under the - reasonable - impression that my next accounts would be for a full year (up to 30th Oct 2014 from 31st Oct 2013) rather than for one day.

    Not only that, but if they wanted me to file accounts for one day, they could have at least notified me rather than sending me another willy nilly fine.

    This is probably HMRC's sixth attempt in the past year to charge me a "penalty" for some made up nonsense, and each of the previous times I have been able to get rid of it by ringing up and mentioning that I have records (!!!).

    This is seriously starting to make me feel angry however, particularly as due to several non-payees I am on the brink of having to close my company and am currently living hand to mouth while trying to complete my degree part time.

    You would almost think HMRC doesn't like small business owners and would rather we all failed and had to sign on.

    I am getting sick of what I see as abuses of power against companies they know are small enough to not be able to afford legal representation and if I did have any money right now I would be escalating this to the courts myself in the hopes of exposing the level of criminality inherent in HMRC today.

    Sorry if I'm ranting, but better here than on the phone to some poor unsuspecting adviser :p

    Maybe my next career should be in fighting for transparency and accountability in government services... I'm sure there are plenty of people who would be willing to back such an endeavor!

    Anyway, to the point. I'm exhausted and emotional and if anyone has any advice for how I should word my letter in reply, I would be heavily grateful.
     
    Posted: Feb 25, 2015 By: Dynumo Member since: Jan 18, 2009
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  2. john1989

    john1989 Guest

    0 0
    Your deadlines are not clear.

    What is clear is that you get reminders from Companies House and HMRC. If you choose to ignore the reminders, you might aswell just make things easier by offering to set up a monthly direct debit for the fines!
     
    Posted: Feb 25, 2015 By: john1989 Member since: Jan 1, 1970
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  3. Dynumo

    Dynumo UKBF Regular Free Member

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    Maybe it's a problem with living in a house with other people, but I think I would know if HMRC had sent me a letter requesting accounts for one day.

    On your second point though, I have met many business owners who suggest budgeting for phony hmrc fines in your financial planning. One has it in his spreadsheet as "Danegeld".
     
    Posted: Feb 25, 2015 By: Dynumo Member since: Jan 18, 2009
    #3
  4. Scalloway

    Scalloway UKBF Legend Free Member

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    You can complete accounts for more than one year for Companies House but HMRC will not accept a tax return for more than 365 days (366 if the period includes a leap year).

    I take it you started your company on 31 October.
     
    Posted: Feb 25, 2015 By: Scalloway Member since: Jun 6, 2010
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  5. john1989

    john1989 Guest

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    Both deadlines and the penalty regime is pretty transparent.

    You might be best trading as a sole trader, you'll only have one deadline to worry about then.
     
    Posted: Feb 25, 2015 By: john1989 Member since: Jan 1, 1970
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  6. UK Contractor Accountant

    UK Contractor Accountant UKBF Big Shot Full Member - Verified Business

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    Just checked Companies House records- your company was incorporated on 25 Oct 12 with your first accounts prepared for the period ended 31 Oct 13. Not sure why you have accounts to 30 Oct?
     
    Posted: Feb 25, 2015 By: UK Contractor Accountant Member since: Sep 18, 2013
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  7. Dynumo

    Dynumo UKBF Regular Free Member

    119 14
    It was registered online on 25th Oct 2012, but I think the date set for the beginning of trading was 31st Oct, which I assume is why that was the date I was to start my accounts. Looking at the output from my submitted ct600 it was definitely done up to 30th and I know I done it to the date requested (if I hadn't would the accounts have not been rejected?)

    Being a sole trader really *would* be better, as I have to submit a self assessment anyway, although my original concern was that it might limit me from working for some customers, and that people may not take me as seriously as I'm still rather young...
     
    Posted: Feb 25, 2015 By: Dynumo Member since: Jan 18, 2009
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  8. UK Contractor Accountant

    UK Contractor Accountant UKBF Big Shot Full Member - Verified Business

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    Your accounts were already made up to the 31 Oct 13, however, for Corporation Tax your Return can not exceed 12 months that's why they have issued a penalty for the 1 day period as your first trading period covers 366 days.

    If you put the full periods figures on the return to 30 Oct 13 just do a nil return for the 1 day period and explain the situation to HMRC by phone.
     
    Posted: Feb 25, 2015 By: UK Contractor Accountant Member since: Sep 18, 2013
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  9. Dynumo

    Dynumo UKBF Regular Free Member

    119 14
    Right, that's what I'll do. Thanks everyone for taking the time to help :)
     
    Posted: Feb 25, 2015 By: Dynumo Member since: Jan 18, 2009
    #9
  10. CathW

    CathW UKBF Newcomer Free Member

    1 1
    Just a thought - I am an accountant and have had several clients that have had £200 penalty notices on filing their first corporation tax return. It seems to happen when you have a dormant period before trade commences.

    So, you should have a dormant period from 25-30 October 2012, a return for the 12 months from 31 October 2012 to 30 October 2013 and a 1 day return for 31 October 2013. I you filed it through the HMRC CT600 system, I would have thought it should have guided you to that (although I have never actually used the HMRC software).

    HMRC would have probably been expecting a return for the 12 months to 24 October 2013 and a second to 31 October 2013.

    In my experience, that situation triggers a random £200 penalty (have had one for a client this week, in fact), which you just have to ask them to cancel. So, it isn't a given that the penalty is actually correct.
     
    Posted: Mar 17, 2015 By: CathW Member since: Mar 17, 2015
    #10
  11. Dynumo

    Dynumo UKBF Regular Free Member

    119 14
    Thought I'd update this in case anyone else finds themselves in a similar situation and finds this on google.

    After writing a letter/submitting a ct600 for the day the problem was solved (phew).

    Thanks for all the advice people!
     
    Posted: Apr 27, 2015 By: Dynumo Member since: Jan 18, 2009
    #11
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