COM130170 - Returns/notices: notices and returns: new companies
New companies often do not start trading or carrying on business on the date of incorporation but may prepare first accounts from the date of incorporation to the end of the first period of trading or business.
If the company does not tell you when trading commenced, COTAX issues a notice to deliver:
- for a period of 12 months from the date of incorporation and, if the date of incorporation is not the first of the month
- for the period from the day after the end date shown on the first notice to the end of the month
For example, where the date of incorporation is 15 June 2018, notices are issued for the periods:
- 15 June 2018 to 14 June 2019
- 15 June 2019 to 30 June 2020
Where the company did not start to trade on the date of incorporation, the company needs to make a return for a period before trading or business commenced.
Example
A company:
- is incorporated on 1 January 2018
- comes within the charge to corporation tax on 1 April 2018, because it begins to trade
- makes up its accounts for the 15 months to 31 March 2019
- is served with a notice to deliver on 31 January 2019, specifying the period 1 January 2018 to 31 December 2018
The company must make a return for the period from 1 January 2018 to 31 March 2018 (Paragraph (Para) 5(3) Schedule 18 Finance Act (FA) 1998) and the filing date is 31 March 2020 (Para 14(1b) Schedule 18 FA 1998).
Do not insist on a formal return or on accounts for a pre-business return period. If accounts are not available, accept a letter or written statement from the company or its agent confirming that it was dormant during the period.
See: