Incorrect corporation tax penalty notices

A member has reported the following issue:

I have recently had several cases where HMRC has issued incorrect CT penalty notices, and this seems to be a recurring problem.

The problem seems to occur whenever we submit two CT returns for a single period of account, either because it is a new company which became active part way through the period, or because the period of account is more than 12 months long. HMRC then issue a penalty notice for the earlier return, incorrectly charging a late filing penalty because the filing deadline is said to be 12 months after the end of the period, when since the return period is part of a longer period covered by a set of accounts, the actual filing deadline is 12 months after the balance sheet date. Presumably the software generating the notices does not recognise this. This happens even when we have previously written to HMRC to advise them that there will be two periods and pointing out what the filing deadline is.

Have other members encountered this issue?

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  • This is a longstanding problem and HMRC are aware of it, though they have admitted that it is not high on their 'to-do' list of things to fix. I send a standard letter to HMRC to appeal and they always accept it.

    My letter text is:

    Following the penalty determination notice received regarding the above named client please accept this letter as a formal notice of appeal.

    The return period in question for the 12 months ended [date] is part of the period of accounts ended on [date]. The return has a filing deadline of 12 months after the end of the period of account under s14(b) Sch 18 FA1998, and as set out in example 3 in CTM93050.

    The return was filed on [date] which is before the filing deadline and accordingly the penalty levied is not due.

    If you have any queries please do not hesitate to contact [name]on [number].
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