Accounting date easement for corporate non-resident landlords
15 December 2020: HMRC has announced a relaxation for non-UK resident companies reporting property income to 31 March rather than 5 April.
The 2019/20 self assessment income tax returns for corporate non-resident landlords (NRLs) will be the final such returns, as from 6 April 2020 the income will be chargeable to corporation tax (CT) rather than income tax.
For income tax it is mandatory to account for property income on a tax year basis (ie, to 5 April). In practice, many taxpayers account to 31 March even though this is not strictly correct. HMRC has announced the following relaxation for corporate NRLs that have been adopting this approach:
“Where a corporate NRL has accounted for property income to 31 March in its income tax returns (ie, where apportionment for 1 April to 5 April at the turn of the tax year is ignored), HMRC will accept this approach for the 2019/20 returns (the last tax return for income tax).
“HMRC will expect the corporation tax return for the period 6 April 2020 to 31 March 2021 to reflect the full 12 months result for the company’s year ending on 31 March 2021 (including the period 1 April 2020 to 5 April 2020).”
HMRC is set to update its guidance (PIM1010) accordingly.
Reminders for corporate NRLs
Each corporate NRL will need:
- A corporation tax unique taxpayer reference (UTR) – unless it already has one for another purpose. If a corporation tax UTR is already held it will be necessary to ask HMRC to cancel the new UTR it will issue.
- Where applicable, to authorise their agent for corporation tax by completing a new 64-8 form with the appropriate corporation tax section completed.
- To inform HMRC if it wishes to use an accounting date other than 5 April. CT notices to file will have a default accounting date of 5 April.
HMRC has now issued UTRs to most corporate NRLs. If a corporate NRL client has not yet received their CT UTR, agents should send HMRC a new signed 64-8 form providing agent authority for corporation tax, together with a covering letter. Agents should quote the income tax self assessment UTR on the covering letter but leave the space for the UTR on the new 64-8 blank.
Letters and 64-8 agent authority forms should be sent to: Charities, Savings and International 1, HM Revenue and Customs, BX9 1AU.