HMRC recently requested that companies hold off submitting company tax returns for periods ending on or after 1 April 2020, whilst it updates its systems following rates changes in the Spring 2020 Budget.
At the Spring Budget, the Chancellor announced changes to the main rate of Corporation Tax, as well as to the structures and buildings allowance (SBA). However, these new rates have not yet been accommodated by HMRC’s systems.
Effective 1 April 2020, the Corporation Tax rate remained at 19 per cent and the SBA rate increased from 2 per cent, to 3 per cent.
Though most companies will not necessarily be rushing to submit their corporation tax returns within weeks of their year-end, those companies wishing to liquidate are likely to want to finalise their tax position as quickly as possible.
HMRC updated its ‘Corporation Tax; service availability and issues’ page to state that companies “should not” submit any company tax returns online with profits chargeable at the 19 per cent rate of corporation tax (accounting periods ending on or after 1 April 2020).
Originally, the plan was to reduce the rate of Corporation Tax to 17 per cent and so HMRCs system is not currently set up to accommodate the rate subsequently remaining unchanged.
HMRC also confirmed that its free filing service (CATO) would be updated on 17 April for SBA claims, for accounting periods ending on or before 31 March 2020.
However, companies with accounting periods ending on or after 1 April, and who also want to claim the new rate of SBA, cannot yet file their returns.
Those businesses needing to file their company tax return before HMRC’s systems are updated are asked to contact the corporation tax helpline.
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If you’re unsure about your accounting year end date, when you should be filing your Corporation Tax return, your resulting liabilities, or indeed when your payment is due, contact your usual adviser at the earliest opportunity.
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