CTM01550 - Corporation Tax: accounting periods: insufficient information to determine
ICTA88/S12 (8)
You may be unable to determine an accounting period in accordance with CTA09/S8 -12, formerly ICTA88/S12 (1) - (7), because a company has failed to make returns or supply accounts or other information. If you have a case where the beginning or end of any accounting period is uncertain, ICTA88/S12 (8) lets you make an assessment on the company for any period you consider appropriate, provided this period does not exceed twelve months. That period is treated as an accounting period of the company unless:
- you decide to revise it when you receive further facts, or
- the company discloses the true accounting period on appeal.
In the latter case, the assessment has effect as if it were an assessment or assessments for the true accounting period or periods.
You can make an assessment using the power in ICTA88/S12 (8) where the beginning or end of any accounting period is uncertain. The Court of Appeal considered whether an assessment was made for an uncertain accounting period in Kelsall v Stipplechoice Ltd, 67TC349. They held that the question whether there was uncertainty was subjective.
You can only revise an assessment under ICTA88/S12 (8)(a) if, when you make the assessment, you are uncertain of the beginning or end of the accounting period. In any case in which a company has not submitted accounts covering an accounting period, you are clearly uncertain. However, when you make an assessment in any other case and you are uncertain as to the accounting period, you should make a note on the file that the assessment is made under ICTA88/S12 (8)(a).
Where you revise an assessment to take account of the true accounting period or periods, you should send a letter to the company (or its agent) showing the revision and any consequential amendment to the due and payable date. Tell the Accounts Office of:
- the amended accounting period, in accordance with AC1401, and
- the revised earliest due date, in accordance with AC1405.
