Enquiries into Company Tax Returns
Letter to agents issued
We sent a letter (PDF 61K) in November 2007 to all agents to tell them about changes applying from April 2008 to the time limit within which HMRC can open an enquiry. Companies are getting details of the change when they next get a notice to deliver a company tax return (form CT603).
Changes after 31 March 2008
For accounting periods ending after 31 March 2008 Finance Act 2007 changes the period during which HMRC can give notice of enquiry into a company tax return (the ‘enquiry window’). The change applies to most returns delivered to HMRC before the statutory filing date and links the end of the enquiry window to the date that the return is received by HMRC. This implements a recommendation made by Lord Carter of Coles in his March 2006 ‘Review of HMRC Online Services’ and is designed to give earlier certainty to companies that file early.
For accounting periods ending on or before 31 March 2008, the enquiry window for returns filed early closes 12 months from the statutory filing date, which is normally 12 months after the end of the accounting period.
For accounting periods ending after 31 March 2008, the enquiry window for most returns delivered by, or on, the filing date will close 12 months from the day on which HMRC receives the return. For example, if a return for an accounting period ended 30 April 2008 is received by HMRC on 26 November 2008 notice of enquiry will not be given after 26 November 2009, 12 months after delivery.
Linking the end of the enquiry window to the date on which a particular return is submitted provides certainty sooner for companies that file early, bringing forward the date at which they can be sure their return will not be subject to enquiry.
The change applies to the majority of companies, including all those that are not members of any group, and also those in small groups as defined in the Companies Act 2006. However, there is no change for companies in groups that are not ‘small’ and the enquiry window for such companies still closes 12 months from the statutory filing date. A ‘Group’ means a parent company and its subsidiary undertaking and for convenience you can see the provisions of Sections 383, 384 and 474 Companies Act 2006 (PDF 32K) showing the meaning of ‘small group’.
Companies in groups that are not ‘small’ will need to declare themselves on their company tax return. We have provided a new check box on the front page of the CT600 return form and a similar option for returns delivered electronically.
For all companies that file late, there is no change. The enquiry window still closes on 31 January, 30 April, 31 July or 31 October next following the first anniversary of the day on which the return is delivered.
You can find the legislation (PDF 24K) at Paragraph 24 Schedule 18 Finance Act 1998 as amended by Section 96 Finance Act 2007.
Enquiries into Company Tax Returns
There are rules for enquiries into company tax returns.
- If your company submits its return on time, we will normally have at least 12 months from the statutory filing date (12 months from the day on which HMRC receives the return for accounting periods ending after 31 March 2008) in which to start enquiries into the return. We may have longer if your company sends in its return late.
- We will tell companies in writing when an enquiry starts and when an enquiry finishes.
- When our enquiries are completed, we will tell your company in writing. If we find nothing wrong, we will confirm that our enquiries have finished. If we think any adjustments are needed to your company's return, again we will tell you in writing.
- If adjustments are required and your company agrees with our figures, we will ask your company to amend its company tax return. You will have 30 days to do so. If you do not do this within 30 days, we will amend the return for the period under enquiry, and for any other period, to give effect to the changes we think are needed.
- Where companies think there are no reasonable grounds for an enquiry continuing, they can apply to the Commissioners to consider whether the enquiry should be closed.
All enquiries will be conducted in accordance with our Codes of Practice. There are separate Codes dealing with enquiries carried out by our local offices and those conducted by Special Civil Investigations and our specialist offices.
Codes of Practice are available.
