Running Branch Office or Legal Establishment - Accounts and Reports

Running the UK branch office or a legal establishment - accounts and reports: if you're running a UK branch office for an overseas company, you may be aware that HMRC requires certain reports to be submitted with regards to the assessment of corporation tax. The requirements may seem unduly complicated if you are not fully conversant with accounting and reporting systems for tax purposes, so here at Coddan Ltd. we try to ensure you have all the relevant information in a format that is as easy to understand as possible.

Reporting and accounting obligations for UK branches: the obligations fall to both parties - the overseas parent company, and the UK branch. HMRC may request the company accounts of the parent company. The information actually required is the same data as supplied to the Registrar at Companies House.

1. Where the company is required by its own country to supply audited accounts, it should supply a copy of these to HMRC, along with a copy of the auditors' and directors' reports.

2. If the country in which the parent company is based requires only a modified version of accounts, the company can supply HMRC with these instead.

3. If the parent company's country does not require the preparation of accounts, the company must still prepare and submit audited accounts as if it had been incorporated under the UK Companies Act.

HMRC also requires the accounts of the UK branch, covering all trading, profit, and losses for the period of time to which the return is related. The UK branch must also supply its own balance sheet, if this has been prepared.

These items may seem very complicated, and here at Coddan we understand that many business owners and managers are experts in what they do, but are not necessarily experienced in producing reports and the correct accounting features for tax purposes. This is why our post-formation services can include help with management and administration of your UK branch, so if your company needs a bookkeeper or accountant to assist with the provision of such reports.