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HMRC internal manual

COTAX Manual

Accounting periods: company accounting periods: administration periods

General

For administrations commencing on or after 15 September 2003, the following rules apply to determine the APs at the start and end of an administration.

  • When a company enters a period of administration a new AP begins on the administration start date and an AP ends on the day before.
  • At the end of a period of administration an AP ends on the administration end date and a new one begins on the day after.

Unlike the rules for APs when a company goes into liquidation, a company is not obliged to change its normal accounting reference date when it enters a period of administration.

For more information about liquidations see the Company Taxation Manual at CTM01520 and CTM36105 onwards.

Other points to note regarding administrations are as follows.

  • An administrator is treated as the ‘proper officer’ of the company, having the same responsibility for a company’s tax affairs as that of a liquidator.
  • Companies can go into administration without a court order.
  • An administrator can be appointed at any time in the life of a company, including during liquidation. The rules for changes to APs by reference to administration start and end dates always apply.
  • Administrators can distribute all of the assets of a company to its creditors, with no obligation to move into liquidation.
  • Administration could result in a company being dissolved without going into liquidation or any other procedure.
  • Administrators can deliver returns before the end of the final AP of the administration.

You can find further information on administrations in the Insolvency Manual at INS3000 onwards.

Automatic AP changes and caseworker review

When a company goes into administration, COTAX is notified automatically by Companies House and enters the case on the Case Records Changes List (CRCL). The details of the administration are not entered onto COTAX automatically and the case has to be reviewed by a case worker. The administrator may also tell you that an administration has started.

You do not normally know the AP end date until the return is submitted for the first administration AP, but COTAX automatically creates APs of 12 months duration.

You must use function ACTP (Amend CT Payer Details) to enter the administration start date onto the record. COTAX automatically:

  • supersedes the AP into which the administration start date falls, setting up an AP ending the day before that date
  • supersedes all later APs, setting up new 12 month APs from the administration start date, up to and including an AP ending after the session date.

The administrator normally tells you when the administration has ended.

You must use function ACTP to enter the administration end date onto the record. COTAX automatically:

  • supersedes the AP into which the administration end date falls, setting up an AP ending on that day
  • supersedes all later APs, setting up new 12 month APs from the day after the administration end date, up to and including an AP ending after the session date.

When you use function ACTP to enter administration start and end dates, COTAX automatically sets up the correct APs whenever possible. You should never use function MAPD to change the AP structure before entering the dates in ACTP.

To prevent the issue of output to the wrong address, you should not use function ACAP (Add / Amend Acting in Capacity) to cease the administrator’s capacitor role until all output relevant to the administration APs has been issued.

Each time an administration start or end date is entered, amended or deleted using function ACTP, COTAX displays screen COT102D to prompt the Clerical Caseworker to print the screen and pass the case to a Technical Caseworker.

The screen print tells you why a review is necessary. You should carry out the review and make any necessary changes using function MAPD.

See:

  • COM1021 for a list of functions to use in particular situations
  • COM1022 for legislation applying to this subject.