Finance Act adds new burden to companies' reporting requirements

September 2004
Management Services;Sep2004, Vol. 48 Issue 9, p4
Academic Journal
This article discusses the impact of the Royal Assent of the Finance Act in Great Britain. Companies are facing a penalty regime should they fail to notify the Inland Revenue when they commence to trade, according to business and financial advisers Grant Thornton. This could adversely affect the cash flow of companies if they inadvertently fail to notify. Clare Hartnell, tax partner at Grant Thornton, said that although the self-employed have had to meet these requirements for over three years, for the first time, companies must provide notification when they commence to trade under the 2004 Finance Act. Failure to do will result in a hefty penalty. Under the rules, a company must provide notification within three months of it becoming liable to British corporation tax. This applies to large and small businesses. For example, overseas companies which become resident in Great Britain, whereby the central management and control is relocated to Great Britain will have a notification requirement. In addition, this applies when a company acquires a source of income, investment or trading. For the unwary, companies that have been dormant for a period and recommence to trade or make investments will also be required to notify.


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