Wait to file company tax returns online

22 April: HMRC has told companies to hold off submitting company tax returns for periods ending on or after 1 April 2020 while it updates systems following rates changes in the Budget.

Although most companies will not be rushing to submit their corporation tax returns within weeks of their year end, those looking to liquidate are most likely to want to quickly finalise their tax position.

In the Spring Budget, the Chancellor announced changes to the main rate of corporation tax and to the structures and buildings allowance (SBA) and these new rates are not yet reflected on HMRC’s systems.

The corporation tax main rate did not fall to 17% on 1 April 2020, as previously planned, but remained at 19%, while the SBA rate has increased from 2% to 3% from the same date.

On 8 April, HMRC confirmed that companies “should not” submit any company tax returns online with profits chargeable at the 19% rate of corporation tax (accounting periods ending on or after 1 April 2020) as the system has not yet been updated to reflect the rate change.

HMRC also confirmed that its free filing service (CATO) would be updated on 17 April for SBA claims for accounting periods ending on or before 31 March 2020. However, companies with accounting periods ending on or after 1 April and wishing to claim the new rate of SBA, cannot yet file their returns.

Those businesses needing to file their company tax return before HMRC’s systems are updated are asked to contact the corporation tax helpline.