One of the measures introduced to help businesses cope with the affects of the COVID-19 pandemic was an extension to filing deadline for company accounts.
When the measure was introduced back in March 2020, companies were invited to apply for a deadline extension. However, from 27 June 2020 to 5 April 2021, most businesses will automatically be granted an extension, removing the need to apply.
Although this move is of course welcomed, an unintended consequence is the affect it will have on any Corporation Tax payments, which remain due within nine months and one day after a company’s year end. Without a completed set of accounts, the amount of tax to be paid is unknown.
Where businesses find themselves in this situation, we advise that they can either make an estimated tax payment or, alternatively they can choose not to make a payment until their exact tax position is known. However, interest will be charged on any overdue payments at a rate of 2.6%.
If you require any advice on the payment of Corporation Tax or accounts filing deadlines, please do not hesitate to contact us.
If your business is facing cashflow issues, a time to pay arrangement can be requested by contacting HMRC on 0800 015 9559 or 0800 024 1222.
Glyn Wharmby – Tax Manager