CTM01515 - Corporation Tax: accounting periods: companies in administration

CTA09/s10(2) to (6)

An accounting period ends immediately before the day on which a company enters administration under Schedule B1 to the Insolvency Act 1986 or equivalent procedures.  

An accounting period will also end and a new one starts when a company ceases to be in administration under Schedule B1 to the Insolvency Act 1986 or equivalent procedures.

Unlike the case where a company is being wound up and 12-month accounting periods apply from each anniversary of the date of commencement of the winding up (CTA10/s12), the general rules about when an accounting period ends in s10 will continue to apply to companies in administration.  Therefore, each accounting period may end by the occurrence of a different event, depending on what happens in that particular accounting period. 

Examples

Company A with an accounting period of 31 December 2024 enters administration on 28 February 2024 and ceases to trade on 30 June 2024.  Its accounting periods are as follows:

·         AP1 – 01/01/2024 to 27/02/2024 - period up to commencement of administration (s10(1)(i))

·         AP2 – 28/02/2024 to 30/06/2024 - period to cessation of trade (s10(1)(d))

·         AP3 – 01/07/2024 to 31/12/2024 - accounting date of the company (s10(1)(b))

Company B has an accounting period of 31 December 2024.  It enters administration on 25 March 2024 and immediately ceases trading.  The administration continues until 30 September 2025.  The accounting periods are as follows:

·         AP1 – 01/01/2024 to 24/03/2024 - period to cessation of trade/entering administration (s10(1)(d) and (i)) 

·         AP2 – 25/03/2024 to 31/12/2024 - accounting date of the company (s10(1)(b))

·         AP3 – 01/01/2025 to 30/09/2025 - cessation of administration (s10(1)(j))

·         AP4 – 01/10/2025 to 31/12/2025 - accounting date of the company (s10(1)(b))

 

Return filing dates


Paragraph 14 Schedule 18 FA98 provides that the filing date for a company tax return is the latest of:

(a)    twelve months from the end of the period for which the return is made;

(b)    if the company’s relevant period of account is less than 18 months, twelve months from the end of that period;

(c)     if the company’s relevant period of account is longer than 18 months, 30 months from the beginning of that period;

(d)    three months from the date on which the notice requiring the return was served.


The relevant period of account is the period for which the company makes up accounts (See also CTM93030).

In the above examples, the returns for Company A would all be due on 31 December 2025 (12 months from the end of the period of account).  The returns for Company B would be due on 31 December 2025 for AP1 and AP2 and 31 December 2026 for AP3 and AP4 (again, 12 months from the end of the period of account).

It should be noted that HMRC’s CT system currently automatically considers that the filing dates for these accounting periods is the 12-month anniversary of each accounting period and may impose late filing penalties if returns are not filed in accordance with its expectations.  For example, the system would consider that Company A’s return for AP1 should be due by 27 February 2025 rather than the statutory due date of 31 December 2025.