CTM93260 - CTSA: the filing obligation: Unsatisfactory return and online filing

To satisfy its filing obligation under FA98/SCH18/PARA3 a company must deliver a company tax return that meets the statutory requirements. A company tax return must include all the information, other documents and statements called for by the Paragraph 3 notice.

If the ‘return’ fails to meet those requirements:

• it is not a return,

and

• the company has not met its obligation.

Such a ‘return’ may be described as an ‘unsatisfactory return’. This description is not a statutory term.

As a consequence of a failure to deliver a return a company may be liable to penalties under FA98/SCH18/PARA17 and 18.

From 1 April 2011, all companies must file their company tax returns electronically for all accounting periods ending on or after 1 April 2010. For further guidance see COM60040. A Government Gateway user ID and password are required in order to file online. This provides the necessary authentication for HMRC to accept the authority of a company tax return submitted electronically. The use of electronic communications for filing purposes was authorised by SI 2003/Reg 282.

Following the transition to mandatory online filing it should be exceptional for HMRC to consider a return to be unsatisfactory. If it is found to be, that will usually only be established when carrying out a review of the return. In such cases, the liability to penalties under Para 17 and, possibly, Para 18 remains.

HMRC will seek to reject as few returns as possible on the basis that it considers them “unsatisfactory”. If such returns are identified they should be reviewed to confirm that there has been a genuine attempt to comply with the mandatory online filing requirements. If so, the company and/or its agent should be notified of the errors and invited to explain and correct them, if still in time to do so. Otherwise, the errors should be considered as part of a risk assessment of the return and amendments made to correct the return under Para 16.