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HMRC internal manual

COTAX Manual

From
HM Revenue & Customs
Updated
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Accounting periods: company accounting periods: dormancy (action guide)

To deal with dormancy correspondence consider steps 1 - 19 below. The guide is presented as follows.

Initial action Steps 1 - 3
   
Flat management company Steps 4 - 6
Club / unincorporated association Steps 7 - 8
Dormant accounts Steps 9 - 11
Letter from company / agent Steps 12 - 14
Holding company Step 15
Community interest / association or Industrial Provident Society Step 16
Company no longer dormant Steps 17 - 19

Initial action

1.  Use function VTPR (View Taxpayer Record) to check if the’ enquiry in progress’ (EIP) signal has been set to ‘Y’ and where it has refer the correspondence to the caseworker responsible for the case.

2.  Use VPPD (View Payments and Postings Details) to check for any outstanding determination or penalties. Where there are any and these are over £200 refer the case to a CT Co-ordinator.

3.  Review the correspondence or return and use VTPR to find out the type of company it has come from.

Flat management company

4.  Use function VTPR to check COTAX notes to see if an agreement has already been given to treat the company as dormant.

5.  Where an agreement has been given, pass the case to a CT Co-ordinator with any return received.

6.  Where an agreement has not previously been agreed, write to the company and if they haven’t provided a copy of their most recent accounts ask them to so we can review their case.

Club / unincorporated association

7.  Where the correspondence or return includes either the most recent set of accounts or annual statement of income, current constitution rules and articles of association, refer the case to an HO Technical Caseworker for review.

8.  Where the correspondence or return does not include any of the above, write to the club or unincorporated association asking them to supply the necessary details so we can review their case.

Dormant accounts

9.  Where you receive a set of dormant accounts, use function DAPD (Display AP Details) to check the current status of the company.

  1. Where the company is already noted as dormant, no further action is required unless a return has been filed. If a return has been filed you should:
  • use function MAPD (Maintain AP Dates) to set up a live AP structure so that the return can be processed and then use LRTN (Log Return) to log and capture the return as ‘e-filed return with manual intervention’ and record the self assessment
  • use function NOTE to show that a dormant return has been filed online
  • leave the AP structure as live.
  1. Where the company is shown as live and a return has not been filed, use MAPD (Maintain AP Details) to set a period of dormancy.

If the company provide an end date for the period of dormancy, use that date. Otherwise, set the end date to 31 May five years in the future.

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Letter from company / agent

  1. If the company says they have ceased to trade take the following action.
  • If they have provided a date, use function MAPD to set up a period of dormancy from the day after the date supplied.
  • If they have not provided a date, contact them and ask for the date they ceased to trade then use MAPD to set up a period of dormancy from the day after that date.
  1. If the company state they are now outside the charge to CT, refer the letter to a CT Co-ordinator to review.

  2. If the company is newly incorporated and has not yet started to trade or will never trade, use Function MAPD set up a period of dormancy from the date of incorporation.

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Holding company

  1. Where the correspondence or return is from a holding company, refer the case to an HO technical caseworker to review.

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Community interest / association or Industrial Provident Society

  1. Where the correspondence or return is from a community interest, community association or Industrial Provident Society, refer the case to an HO technical caseworker to review.

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Company no longer dormant

  1. Where the correspondence states that the company is no longer dormant and has started to trade, use function MAPD to set up live accounting periods from the dates given.

  2. Where you have had to create a long period of account, use function RDAC (Record Filing Date Adjustment) to amend the filing date.

  3. Use ACTP (Amend CT Payer) to set the Section 55 signal to ‘Y’.