Corporation tax filing deadlines and elections, in view of extended accounts filing dates

Mon 09 Nov 2020

We understand that HMRC currently has no plans to extend the UK corporation tax return filing deadline despite the extension to the deadline for filing financial statements with Companies House.  As a reminder, the time limit for filing company accounts has been extended by 3m to 12m from the accounting period end for private limited companies. 

For some clients who take advantage of the extension, this might make it difficult to meet the tagging requirement in time to file the company’s corporation tax return by the normal tax return filing deadline.

HMRC has published guidance that explains where the delay in filing was as a result of the impact of Covid-19 this will qualify as a reasonable excuse and no penalty will be charged – see www.gov.uk/tax-appeals/reasonable-excuses.  This contains the following comment:

• If you’re affected by coronavirus (COVID-19): HMRC will consider coronavirus as a reasonable excuse for missing some tax obligations (such as payments or filing dates).

It may be possible to obtain from HMRC a short extension for the filing deadline.    If an extension is agreed in this way it should avoid HMRC issuing an automatic filing penalty and the company having to appeal against it.

An important factor to consider where the normal filing deadline is extended, is the fact that claim and election deadlines will remain at their normal due dates (unless HMRC permit a later claim or election to be made).  Examples of claims and elections that are important to check at the normal 12m filing date are:

• Making a disregard election (SI 2004/3256 reg 6A) for a company that is not within the SAO rules (12m from the end of the relevant accounting period)
• CTA 2009 s186 election to spread an adjustment in stock value when moving from realisation to mark to market basis – over 6 years (12m after the accounting period end)
• The 2 year and 4 year claim and election deadlines in respect of previous accounting periods ending 2 and 4 years before the normal 12m filing deadline for the current accounting period.

For a further discussion of the implications of extended corporation tax filing deadlines, for your business, please get in touch with a member of the Mazars tax compliance team.