 Up until 1999 no corporation tax was due unless HM Revenue & Customs (HMRC) raised an assessment on a company. Companies were, however, obliged to report certain details to HMRC so that the right amount could be assessed. This changed for accounting periods ending on or after 1 July 1999, when self-assessment was introduced. Self-assessment means that companies are required to assess themselves and take full responsibility for that assessment. If the self-assessment is wrong through negligence or recklessness, the company can be liable to penalties. The self-assessment tax return needs to be delivered to HMRC 12 months after the end of the period of account in which the accounting period falls (although the tax must be paid before this date). If a company fails to submit a return by then, it is liable to penalties. HMRC may then issue a determination of the tax payable, which cannot be appealed – however, in practice they wait until a further six months have elapsed. Also, the most common claims and elections that may be made by a company have to be part of its tax return, with a time limit of two years after the end of the accounting period. This means that a company submitting its return more than one year late suffers not only from the late filing penalties, but also from the inability to make these claims and elections.
