Corporation Tax

IAIN BETHUNE CA FCMA

Since 1 August 1999 companies have been subject to Corporation Tax Self Assessment and are thus aligned with individuals and their self assessment routines.

Like the personal self assessment routine the company has to compute its tax liability, pay that amount and submit a self assessment return (form SA 600) to the Inland Revenue.

The principal difference between the two types of self assessment form is that there is no CTSA equivalent to the Standard Accounts Information section in the personal Self Assessment tax form and annual accounts of the company must be sent to the tax office..

The inference on the enquiry selection process is that review of the accounts will be done by an Inspector ( annual accounts must accompany the return as before). Computer selection may be based on the type of business carried on, the level of turnover and any apparent peculiarities in the personal returns of directors and main shareholders.

Transactions between associated companies will continue to interest the Inspector and the commerciality of any connected person transaction has to be supported by adequate records.

The Revenue's enquiry handbook states that when Inspectors are assessing risk they should look at " the information on the taxpayer's history, not only in relation to previous returns but also in relation to Debt and Return Management, employer obligations etc. remember that taxpayers who are non-compliant in one area may be non compliant in others."

It is stated Revenue policy to expand aspect enquiries into full enquiries wherever possible, and the Revenue is likely to use the aspect route to attack those cases where an immediate full enquiry might not be appropriate.

[Home] [ Up]