Accounting period

System
System Posts: 100,534 🤖 Admin 🤖
edited 12:08PM in AAT member discussion
Can someone help, please? I am preparing accounts for year end 30 September 2006

Client:

Date of incorporation: 1 September 2003
Accounting Ref. date: 30 September
Last accounts made up: 30 September 2005 (Dormant)

Client's CT603 notice to deliver states period 30 Sep 2005 to 31 Aug 2006.

Why?

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Accounting period

    The CT603 shows the period that the Revenue want a CT600 return based on (complete 12months).

    Obviously I am unaware to the back ground but it sounds like the company has only ever filed one return each year.

    I can see your confussion and to "correct"... well "tidy up" is a better description, you will need to submit two returns:-

    30.09.05 to 31.08.06 ( 2005/06 )
    01.09.06 to 30.09.06 ( 2006/07 )

    When the Revenue issue a new CT603 it will show the period 01.10.06 to 30.09.07 ( 2007/08 ).

    Hope this helps.

    Regards

    Dean

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Accounting period

    I wouldn't bother with 2 CT600's - bit of a waste of time.

    It is not unusual for HMRC to be 2 steps behind in terms of what's happening with accounting periods. To be polite, just send a quick letter saying company was dormant to 30-09-05 and that the first trading period will be y/e 30-09-06.

    If time is short then I wouldn't even bother doing that. Submitting the accounts and CT600 for y/e 30-09-06 will get them to update their records. I 've had all kinds of bizarre accounting periods on the CT603.

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Accounting period

    Dean there is nothing difficult in apportioning PCTCT, therefore, no time wasted and the Revenue get exactly what they've asked for.

    Another point is if you try to file on-line with the Revenue's software you can't override their date ranges. More time would be taken for them to receive your correspondence and update their records.

    Regards

    Dean
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Accounting period

    I wasn't suggesting it was difficult but, in my humble opinion, preparing and reviewing 2 CT600s, 2 CT comps, 2 capital allowances comps, getting client to sign 2 forms etc. when only 1 is required is a little unnecessary.

    Of course, technically, you do not have a choice but to file a single CT600 for the year to 30-09-06. There is no AP event falling on 31-08-06 and thus 2 APs are not an option. You either submit a CT600 for the correct AP or send a letter in advance if you really want the CT603 reissued.

    I do not file online using the Revenue's own software so I can't really comment on that problem.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Accounting period

    I still disagree with you on this, your suggesting to submit a single return for the period 30.09.05 to 30.09.06 essentially 12 months. Ok I do agree that this is a fully taxable 12 months but the Revenue have asked for a return to 31.08.06 (11 months) isn't there a potential cash flow advantage here for the client?

    Example:
    (your suggestion)
    30.09.05 to 30.09.06 PCTCT = £150,000 (12 months)
    Tax charge 150,000 @ 19% = £28,500 Payable Jun 07

    (my suggestion)
    30.09.05 to 31.08.06 PCTCT = £137,500 (11 months)
    Tax charge 137,500 @ 19% = £26,125 Payable May 07

    01.09.06 to 30.09.06 PCTCT = £12,500 (1 month)
    Tax charge 12,500 @ 19% = £2,375 Payable Jun 07

    Granted the total tax payable is the same and granted it's payable on by the same day but as there is time in preparing the accounts (30.09.06) I feel the client benefits in submitting two returns.

    Apologise Dean I was abit put out by your "bit of a waste of time" comment, specially as I gave the strict answer and hence this thread carrying on.

    Regards

    Dean


  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Accounting period

    No problem Dean, just trying to see things from a practical point of view.

    Playing Devil's Advocate for a moment..

    Aside from the additional time and effort, where is the cash-flow advantage in your method?

    Your first CT payment is due 1 month earlier. That seems to be a cash-flow disadvantage to me?

    Perhaps I am missing something. (It is January after all!)

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Accounting period

    I'm having one of them days!

    Had to much time off I think!

    :roll:

    My day has been dealing with apportioning CT periods to incorporate in the abolished NCD rules with dividends declared either side of the 31.03.06... not to mention excess brought forward :twisted:

    Have you got to grips with this yet? The more I look at it the more my brain goes off on a tangent.

    Regards

    Dean

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