Corporation Tax Act 2009 section 1227

Accounts not drawn up

Section 1227 provides a method for attributing management expenses to the correct accounting period when a company with investment business has not drawn up accounts, or has not drawn them up for a particular period.

• Where a company has not prepared accounts (or not for a specific period), management expenses may not be attributable to an accounting period under the normal rules in sections 1225 or 1226
• The solution is to assume that a notional period of account exists for each accounting period that is not already covered by an actual period of account
• Management expenses are then treated as debited in accounts for that notional period, but only if doing so would be consistent with UK generally accepted accounting practice (UK GAAP)
• Where no accounts are actually prepared, UK GAAP (rather than international accounting standards) is the applicable standard for determining when expenses would be recognised