Tx notes fa22 Final

June 2023 to March 2024 exams
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Example 1 
Photo plc has Taxable Total Profits for the year ended 31 December 2023 of £2M, its lowest profit 
figure for several years.
Show how the liability for the year ended 31 December 2023 will be settled. 
2. Corporation tax return 
(a)
Companies that do not receive a tax return are required to notify HMRC if they have income or 
chargeable gains on which tax is due. This must be done within 12 months from the end of the 
accounting period in which the liability arises, otherwise the standard penalty for late 
notification will arise (as above 1.1).
(b)
The 
filing date
for accounts and computations is 
12 months after the end of the financial 
accounting period
. 
Returns must now be made online and any corporation tax paid electronically.
(c)
If the accounts and computations are filed late there is a fixed penalty of £100. If the return is 
filed more than 3 months after the filing date the fixed penalty is increased to £200 (These 
penalties become £500 and £1,000 if it is the third consecutive time the return is late).
(d)
Returns may be subject to a random or specific enquiry by the HMRC. Written notice of the 
HMRC’s intention to make an enquiry is given within 12 months from the date the return is 
received by HMRC.
(e)
There will be an additional corporation tax related penalty of 10% of the tax unpaid 6 months 
after the return is due, if the self-assessment tax return is more than six months late, or 20% of 
the tax unpaid 6 months after the return is due, if more than 12 months late.
(f)
HMRC may amend a return to correct obvious error within nine months of the day the return is 
filed. A company may amend a return within 12 months of the filing date.
3. Claims 
(a)
Wherever possible claims must be made on a tax return or on an amendment to it and must be 
quantified at the time the return is made.
(b)
If a company believes it has made an error in a return, an error or mistake claim may be made 
within four years from the end of the accounting period.
(c)
Other claims must be made within four years of the end of the accounting period unless a 
di
ff
erent time limit specified.
4. Records 
(a)
Companies must keep records until the latest of:
‣
six years from the end of the accounting period
‣
the date any enquiries are completed
‣
the date after which enquiries may not be commenced
(b)
All businesses records and accounts including contracts and receipts must be kept
(c)
Failure to keep records can lead to a penalty or up to £3,000 for each accounting period 
a
ff
ected

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