Commentary on Sections Part 2: Charge to corporation tax: basic provisions Overview Section 11: Companies with more than one accounting date
73.This section allows a company carrying on more than one trade to nominate the accounting date which marks the end of the accounting period. It is based on section 12 of ICTA.
74.The section is most likely to apply to a non-UK resident company carrying on more than one trade in the United Kingdom through a permanent establishment. If a UK resident company carries on more than one trade it prepares a single set of accounts to cover all the company’s activities. A non-UK resident company may not be subject to these regulatory requirements. Without this section an accounting period would end at each separate accounting date.
75.The company is allowed to choose which accounting date is used for the purposes of the test in section 10(1)(b). The company’s choice is subject to review by HMRC. In the source legislation this power is exercised by the Commissioners for HMRC. In practice it is exercised by an officer. Subsection (3) reflects that. See Change 1 in Annex 1.
76.The source legislation does not provide for the situation where a company has one or more businesses in addition to its trades, or several businesses but no trade. The effect is that the company’s choice and the officer of Revenue and Customs’ discretion is limited to selection of an accounting date relating to one of the company’s trades. In other words, neither the company nor the officer can choose as the accounting period end date an accounting date of one of the company’s businesses which is not a trade.