Chapter COM100020

Published date16 April 2016
Record NumberCOM100020
CourtHM Revenue & Customs
IssuerHM Revenue & Customs

This subject is presented as follows.

Companies outside the charge to CT
Companies in receivership, administration, administrative receivership or liquidation
Members clubs and voluntary associations
Companies struck off

Companies outside the charge to CT

If a company has been served with a notice but is outside the charge to CT because, for example, it is dormant, it is strictly liable to a penalty for failure to deliver a return.

However, in practice, if the company was outside the charge to CT for the period for which a notice has been issued and a penalty has not already been charged:

  • do not charge a penalty, but use function MAPD (Maintain Accounting Period Details) to amend the AP structure and set the dormant AP status, causing COTAX to automatically set the ‘no penalty required’ signal
  • do not insist on a formal return.

If the company was outside the charge to CT for the period for which a notice has been issued and a penalty has already been charged:

  • use function MAPD to amend the AP structure and set the dormant AP status, when COTAX enters the case on work list PENR (Penalties Requiring Review) with an attribute of ‘company outside the charge to CT’
  • use function PPEN (Prepare Penalty Determination) to discharge the penalty on appeal, where one has been made
  • do not insist on a formal return, but treat the correspondence from the company as an appeal when the company has made no formal appeal against the penalty determination.

COTAX does not allow you to charge a penalty for a period that is recorded as, or is included in a period of dormancy.

Companies in receivership, administration, administrative receivership or liquidation

Companies that are in receivership, administration, administrative receivership or liquidation can incur penalties for failure to deliver a return on time. In practice, HMRC is unlikely to receive payment towards outstanding penalty charges in many of these cases.

Administrations

Under the Enterprise Act 2002, administrators are proper officers in legal terms, so they are responsible for the tax affairs of the company.

This includes delivery of returns for the period of administration and payment of tax for that period.

Companies in administration are liable to late-filing penalties if they fail to deliver a return on time for a period that falls in the administration.

The start of a period of administration means the end of the existing accounting period (AP) on the day before the administration start date...

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