Second Annual Return Not Trading

caesar

Folks, I read a few of the old threads about this topic and while helpful I'm looking for up-to-date info.

I incorporated a business on 17/02/2021. And then a couple of things changed, so I ended up deferring trading. 

I've no plans to have the company struck off as I am in process of starting activity in the next week. While there are a few angles to this, I think the answers will be pretty straightforward. If not, I'll hire someone, but I don't think I need to just yet.

ARD

• Filed the first 6-month return without accounts last year. ARD date was 17/08/2021.
• Was late on that. Somehow got confused as I'd submitted a form for the Beneficial Ownership Register around the first ARD date. It was Nov 2021 before I submitted it along with the penalty. 
• With the date on the second ARD fast approaching I don't want to mess that one up. The return date is 17/08/2022 bringing us to 18 months after incorporation.

Q: Am I right in thinking I’ve 56 days beyond ARD date itself? From what I remember the penalty I paid last year was based on x number of days beyond some date in Oct (hence it wasn’t astronomical). 

Options (given company status)

As far as I know, I've two options here. Either: 

a) submit the second annual return B1 next week with a B73 to push out the ARD date (furthest I can push it out to is 17/02/2023 i.e. 6 months I believe, but unclear whether I can push it into another calendar year—don’t think I can as then there’d be a calendar year with no Annual Return…)

OR 

b) submit the second annual return B1 with financial statements next week. Those financial statements would be for 18 month period I assume.

I think it’s pretty clear-cut that these would be dormant company financial statements. Assume if I have transactions on 16/08/2022 or 17/08 itself then surely changes that status? I’m assuming this is why there’s the 56-day thing…to give time to the accounts being prepared and co status to be clearcut etc… (note Q below re accounting period and ARD date)

Dormant/Inactive…yet has expenses?

I've always understood dormant companies to be those which haven't had any income. Yet in the UK they seem to have provisions for expenses while dormant. What's the case here? I’ve had some expenses since the incorporation date ( ~3k) but as mentioned haven't been actively trading as such, meaning the company revenues = 0 up to today. Any expenses I've just been paying those myself. I'd prefer if those were in the company as to me they are effectively pre-trading expenses but willing to let slide if it will cause headaches.

Revenue registration

Know CRO returns are separate from Revenue but I hadn’t registered the company for Corp Tax as I thought I only needed to do this once trading (issuing invoices). I can’t find a ref to “within 30 days of trading” rather than incorporation date over on revenue.ie but sure I saw it somewhere before Im sure). Either way is there something about needing to register once a certain timeframe has passed? 

Revenue reached out to me for a Statement of Particulars in April 2022. I submitted that and indicated on that form I’d be trading by mid-June 2022 and then I hit some snags delaying things further. Finally past those!

Accounting Period / ARD dates.

I know the max accounting period is 18 months which lines up with my current ARD date but had a thought.

Can I have a short accounting period for the first set of accounts? What I’m thinking is having the first accounting period run from 17/02/2021 to 31/12/2021. And then that allows me to run Jan 1st to 31st cleanly each year. Seems optimum.

Assuming this is possible, I think this means the furthest I could push out the ARD date is to 30/09/2022* given the rule around having the ARD no later than 9 months after the period of the attached financial statements (i.e the first set for 17/02/2021 to 31/12/2021). Because of what I’ve outlined above these would be defacto dormant company accounts for that period of 2021. And then I’d have a proper set of active company accounts going in with next year's AR.

*If Im right in my thinking with the 56-day thing, then as far as I can tell I'll pretty much have both my financial admin for the company and my personal tax affairs landing at the same time re self-assessment (which right now seems optimal)  

***

What am I missing? 🤓

Alan_007_

What am I missing? 🤓

An accountant.

Not trying to be smart, but if your business is going to be trading you'd be better off engaging the services of a professional instead of trying to do things yourself.

gudede

You need to do a set of accounts. You also previously made an mistake in filing your B1 late. Make sure this doesn’t happen again because the late fee will be the least of your worries.

ari101

You have 56 days from when you file the B1 to lodge accounts with the B1 signed signature page.

Yes; latest ARD of 30/09 for 31/12 year end. Assuming you want a Dec year end, doing a B73 now can set that up cleanly for future.

You can pick any year end up to max 18 months, so you could do incorporation to 31/12/2021, or maybe to 30/06/2022, for example. You could go for a longer opening period and change your company year end to Dec later, but may need to hold using your B73 option if you intend to do that as there are limits in how often you can change.

A Dec year end will need accounts filed in Nov latest, which will be around the personal tax deadline, if you do maximise the 56 day upload window, however, the corp tax filing will still be due on 23 Sept, so once trading accounts will need to be drafted by September despite the possible CRO leeway.

Don't be late with this annual return or you'll find yourself hiring a solicitor to try get your audit exemption back 😅

Regardless of the period you choose, you will need a basic set of abridged accounts that comply with companies act, even if it is completely dormant with just Share Capital and corresponding debtor on the balance sheet. Best to find an accountant in practice to draft and advise on other matters.

P.S. Some origin of the 56 days, it was a 28 day bonus to encourage electronic filing, with 28 days grace period to upload the signed accounts and snail mail the signed form in. Even before scanned signatures were allowed the had decided to just simplify the process and keep the time limits