Section 7 enables an assessment, on an estimated basis if necessary, to be made for an accounting period beginning on or after the commencement of the winding up but before the end of that accounting period.

What is the purpose of this?

Under section 144 (4) an inspector may make an estimated assessment only if a company make default in the delivery of a statement, or the inspector is not satisfied with the statement. It is not possible for a company either to make such a statement or to make default in its delivery before the end of the accounting period. Hence, section 144 (4) would not empower an inspector to make an estimated assessment before the end of the accounting period. Special authority is, therefore, required in the circumstances of the winding up to enable an inspector to make an assessment of which the liquidator must take note.

Is this the winding up that occurs before the end of the company's own accounting period?

Yes.

I take it this is for the purpose of facilitating a winding up?

Yes.

It does not do any harm to the winding up of——

No. It might be an assessment that would be in dispute, but no doubt in the course of the winding up the dispute would be resolved. It would have to be. In fact it would be improper to wind up the company without discharging its debts, which could include the debt of corporation tax.

Just as a matter of tidiness, could I refer to section 9, sub-section (7) which seems to deal with a winding-up situation. Would the provision in section 7 not be more appropriate in section 9 (7)?

Section 9 seems to me, Deputy, to deal with the basis of the period for assessment, and this is the idea to deal with the liquidation situation that might arise in between. Would that be the explanation?

That is right. When a company commences a winding-up process under section 9 (7), that commencement of winding up terminates the accounting period which immediately precedes it, and that might be less than the 12 months.

The new accounting period operates from the winding-up date onwards. Section 7 would enable an assessment to be made in relation to that period before it came to an end.

Then corporation tax will continue even though the corporation has been wound up——

Yes.

——as long as there are profits there.

Because it is still a trading entity, I suppose?

Yes.