The Section 884 of the taxes Consolidation Act,1997 has stretched the meaning of a Corporation Tax return to also cover financial statements. This, added to the prevailing electronic filing of tax returns provides a legal framework for the compulsory submission of electronic Financial Statements as a necessary inclusion in the tax return. All companies falling under the purview of Companies Act 2014 are required to submit their financial statements to Revenue in electronic iXBRL Format. Financial statements in electronic format contain important information used for calculating tax problems or uncertainties of companies. This skill of taking in important information in a computerised format through ROS vastly improves the ability of Revenue to analyse the groups of information and use it for assessing risk of a firm. This information can be used to get an overall picture of the organization and for creating useful reports, presentations to top management. This data can also be used by Revenue for contrasting basic accounting information of firms , primary audit inspections and creating a template to identify possible tax problems in future. These statements are useful for investigators to get ready for periodical checks of firms and for chalking out actions to enforce Revenue rules. This duty to submit electronic financial statements was started in a staggered manner and covers all Corporation Tax filers falling under Phase 1 and Phase 2 of rules for selection.
Companies in Liquidation
It is not mandatory for firms in liquidation to submit electronic financial statements along with their Form CT1 and the decision is left to the discretion of the particular Revenue Branch under which the firm is operating. Revenue reserves the right to demand electronic financial statements from such firms under special cases. These decisions are similar to the decisions taken to exempt firms from submitting Form CT1 in electronic format. If a Form CT1 is filed, Revenue looks to apply the following circumstantial heads to ultimately decide if an electronic submission is also required: Companies in Liquidation that are not Voluntary For firms in liquidation not having any net assets to distribute, Revenue can decide that an “Extracts from Accounts” on Form CT1 is sufficient to replace a iXBRL return. But if a company or firm has not fulfilled its obligations with respect to Form CT1 till the date of liquidation, then Revenue can demand that an iXBRL return be submitted. Companies in Voluntary Liquidation For firms under voluntary liquidation where the net assets for distribution does not go over £25,000 and if all other formalities under tax and legal rules of firms have been met up to the liquidation date, a formal request to refrain from filing the iXBRL return can be made individually to the particular Branch Manager. If the request is approved, then the exemption from submitting an iXBRL return is to be duly noted in the Revenue’s records. This exemption pertains to both the length of time before and during liquidation. At DataTracks, we are eager to assist in spreading our wealth of knowledge and experience in the field of regulatory reporting. Get in touch with us at firstname.lastname@example.org