CW Energy LLP

Ring Fence CT liabilities 2011

Corporation tax and supplementary charge interest.

Readers will be aware that the rate of supplementary charge increased from 20% to 32% from 24th March 2011. Due to the transitional provisions the additional 12% SCT liability arising during 2011 as a result of this increase was treated as separately payable over three additional instalments.

Following the submission of the 2011 CT returns we have noticed when reviewing the acknowledgement of CT return form received from HMRC that the interest calculated on overdue tax for a number of our clients appears to have been calculated incorrectly in a number of cases.  The issue seems to be that HMRC software has not been updated to deal with the additional instalment obligations in 2011 and we understand that calculations of the interest on these instalments is being made manually.

We have also noticed that at least one major software package has also not been updated to correctly reflect the additional instalment obligation.

In the cases we have seen it appears that the interest charged on the HMRC notice is excessive. We would therefore recommend that companies carefully check the interest calculations sent to them by HMRC to make sure that they are not overstating the position.

If anyone would like to discuss this issue please contact Paul Rogerson 020 7936 8309 or their normal CW Energy contact.