Readers’ forum: Correcting corporate tax return error

The accounts of our client a UK owner managed business (OMB) company showed an overdrawn director’s loan account as at 31 May 2021 of some £48 000. On 22 August 2021 the sole director-shareholder confirmed to us in writing that a repayment of the balance to the company was being made that very day and on this basis both a s 455 charge and a claim for relief therefrom was claimed in the company’s corporation tax return for May 2021 in respect of loans to participators repaid within nine months.

Preparation of the May 2022 accounts had been delayed and it was only in June 2023 that we became aware that no such repayment was made by the director. In response the client advised that this was a genuine case of confusion whereby he intended to make the repayment but got distracted before executing...