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General rule: 9 months after the end of the accounting period

 

"(1)     Corporation tax for an accounting period is due and payable on the day following the expiry of nine months from the end of that period.

(2)     If the tax payable is then exceeded by the total of any relevant amounts previously paid (as stated in the relevant company tax return), the excess shall be repaid." (TMA 1970 s.59D(1) - (2))

Tax payable calculated in accordance with FA 1998, Sch 18

"(3)     The tax payable means the amount computed in accordance with [the first to fourth steps of]3 paragraph 8 of Schedule 18 to the Finance Act 1998." (TMA 1970 s.59D(3))

Relevant amounts previously paid

"(4)     Relevant amounts previously paid means any of the following, so far as relating to the accounting period in question—

(a)     any amount of corporation tax paid by the company and not repaid;

(b)     any corporation tax refund surrendered to the company by another group company;

(c)     any amount by which the sums available for set off under Step 4 of the calculation in paragraph 8 of Schedule 18 to the Finance Act 1998 (amounts set off against overall tax liability) exceeds the amount against which they may be set off under that provision;

(d)     any amount treated as corporation tax paid in respect of profits of the company by virtue of regulations under section 62 of the Finance Act 2004 (deductions from payments to sub-contractors)." (TMA 1970, s.59D(4))

General rule: 9 months after the end of the accounting period
Close company loans and benefits tax

Group payment agreements

 

"(1)     An officer of Revenue and Customs may enter into arrangements for the specified purpose with some or all of the members of a group.

(2)     For the purposes of subsection (1), arrangements entered into with some or all of the members of a group are for “the specified purpose” if they are arrangements for one of those members to discharge any liability of each of those members to pay corporation tax for the accounting periods to which the arrangements relate." (TMA 1970, s.59F(1) - (2))

Meaning of group

"(3)     For the purposes of this section, a company and all its 51% subsidiaries form a group and, if any of those subsidiaries has 51% subsidiaries, the group includes them and their 51% subsidiaries, and so on." (TMA 1970, s.59F(3))

No effect on individual liability

"(5)     Arrangements entered into under subsection (1)—

(a)     do not affect the liability to corporation tax, or to pay corporation tax, of any company to which the arrangements relate, and (b) do not affect any other liability under the Tax Acts of any company to which the arrangements relate." (TMA 1970, s.59F(5))

Group payment agreements

Claim for early repayment due to change of circumstances

 

"(1)     This section applies where a company has paid an amount of corporation tax for an accounting period and the circumstances of the company change, so that the company has grounds for believing that the amount paid exceeds its probable tax liability although that liability has not been finally established.

(2)     The company may, by notice given to an officer of the Board, claim repayment of the excess." (TMA 1970 s.59DA(1) - (2))

No claim before material date

"No such claim may be made before the date which under section 826 of the principal Act (interest on overpaid tax), subject to regulations under section 826A of that Act, is the material date in relation to that tax." (TMA 1970 s.59DA(2))

Content of notice

"(3)     The notice must state—

(a)     the amount which the company considers should be repaid, and

(b)     its grounds for believing that the amount paid exceeds its probable tax liability." (TMA 1970, s.59DA(3))

Application for FTT to determine amount of repayment 

"(4)     If the company has appealed against an amendment of an assessment, or an assessment, relating to the tax liability in question, and the appeal has not been finally determined, it may apply to the tribunal for a determination of the amount which should be repaid to the company pending determination of the liability.

(5)     Any such application is to be subject to the relevant provisions of Part 5 of this Act (see, in particular, section 48(2)(b))." (TMA 1970, s.59DA(4) - (5))

Disregard of certain deductions from payments to subcontractors

"(7)     If a company makes a claim or application under this section before it has delivered a company tax return for the period in question, any deductions under section 61 of the Finance Act 2004 (deductions from payments to certain subcontractors) shall be disregarded in considering whether the amount paid by the company exceeds its probable tax liability."  (TMA 1970, s.59DA(7))

Claim for early repayment due to change of circumstances

Instalments of corporation tax: large companies

 

"(1)     Save as regards any amount falling within regulation 4(1)(b), (2)(b), (3)(b) or regulation 5A, amounts in respect of the total liability of a large company for an accounting period shall be treated as becoming due and payable as follows.

 

(2)     Subject to paragraph (4), the amount of the company's total liability for that period or, as the case may be, the specified percentage amount shall be treated as becoming due and payable in instalments (not exceeding four) on the dates specified in paragraph (3)." (SI 1998/3175, para 5(1) - (2))

First instalment: 6 months and 13 days after start of accounting period

"(3)     The first instalment payment shall be treated as becoming due and payable on the date which is six months and thirteen days from the start of the accounting period." (para 5(3))

Final instalment: 3 months and 14 days after end of accounting period

"The final instalment payment shall be treated as becoming due and payable on the date which is three months and fourteen days from the end of the accounting period." (para 5(3))

Intermediate instalments: 3 months after preceding instalment

"An additional instalment payment or additional instalment payments shall, where the length of the accounting period so allows, each be treated as becoming due and payable on the date which is three months after the date of the immediately preceding instalment payment." (para 5(3))

Very short accounting period

"(4)     Where the length of the accounting period is such that the date which is three months and fourteen days from the end of the accounting period falls earlier than the date which is six months and thirteen days from the start of the accounting period, the amount of the company's total liability for that period or, as the case may be, the specified percentage amount shall be treated as becoming due and payable on the date which is three months and fourteen days from the end of the accounting period." (para 5(4))

Amount of each instalment

"(6)     The amount treated as becoming due and payable on the first instalment payment date is the smaller of CTI and the amount resulting from the formula specified in paragraph (5).

 

(7)     The amount treated as becoming due and payable on each subsequent instalment payment date other than the final instalment payment date is the smaller of—

(a)     the balance of the company's total liability for that accounting period or of the specified percentage amount carried forward from the immediately preceding instalment payment date, and

(b)     the amount resulting from the formula specified in paragraph (5).

 

(8)     The amount treated as becoming due and payable on the final instalment payment date is the balance of the company's total liability for that accounting period or of the specified percentage amount carried forward from the immediately preceding instalment payment date." (para 5(6) - (8))

The formula

"(5)     Where in accordance with paragraph (2) amounts in respect of the amount of the company's total liability for an accounting period or in respect of the specified percentage amount are treated as becoming due and payable in instalments, the amount treated as becoming due and payable on any instalment payment date shall be calculated in accordance with paragraphs (6) to (8) and by reference to the formula—

 

where—

CTI is the amount of the company's total liability for that accounting period or the specified percentage amount less any amounts falling within regulation 5A(1), and

n is the number of whole months falling within that accounting period plus the appropriate decimal." (para 5(5))

“the appropriate decimal” is a decimal, calculated to two places rounded arithmetically where necessary, representing the number of days in the accounting period falling outside the whole months falling within that period and corresponding to the fraction of which the numerator is the number of those days and the denominator is 30;" (para 5(9)

Instalments of corporation tax: large companies

Instalments of corporation tax: very large companies

 

"(1)     Except in respect of any amount falling within regulation 5AZC or 5A, amounts in respect of the total liability of a very large company for an accounting period are due and payable on the following days." (SI 1998/3175, para 5AZA(1))

First instalment: 2 months and 13 days after the start of accounting period

"(2)     Where the accounting period is 12 months—

(a)     the first instalment is due on the day (“instalment 1 day”) which is 2 months and 13 days after the first day of the accounting period;" (para 5AZA(2))

Subsequent instalments: 3 months after previous instalment

"(2)     Where the accounting period is 12 months—

[...]

(b)     the second instalment is due on the day (“instalment 2 day”) which is 3 months later than instalment 1 day;

(c)     the third instalment is due on the day (“instalment 3 day”) which is 3 months later than instalment 2 day; and

(d)     the final instalment is due on the day (“the final instalment day”) which is 3 months later than instalment 3 day." (para 5AZA(2))

Accounting periods shorter than three months:

"(3)     Where the accounting period is less than 12 months, steps 1 to 5 apply instead of paragraph (2).

 

(4)     Step 1 is to determine if the accounting period ends—

(a)     on the last day of the month, in which case find the day which falls 14 days after the last day of the previous month and apply step 2;

(b)     other than on the last day of the month and where there is a day with the same date (“an equivalent day”) in the previous month, in which case find the day which falls 14 days after the corresponding day in the previous month and apply step 2; or

(c)     other than on the last day of the month and where there is not an equivalent day in the previous month, in which case find the day which falls 14 days after the last day in the previous month and apply step 2.

 

(5)     Step 2 is to determine if the day found under step 1 falls on or before the first day of the accounting period and—

(a)     if it does, an instalment is due on the last day (“the only instalment day”) of the accounting period and no further steps apply; or

(b)     if it does not, an instalment is due on the day found under step 1 (“the final instalment day”) and apply step 3.

 

(6)     Step 3 is to determine if the day (“D1”) which falls 2 months and 13 days after the first day of the accounting period falls on or after the final instalment day and—

(a)     if it does, the final instalment day becomes the only instalment day and no further steps apply; or

(b)     if it does not, an instalment is due on D1 (“instalment 1 day”) and apply step 4.

 

(7)     Step 4 is to determine if the day (“D2”) which falls 3 months later than instalment 1 day falls on or after the final instalment day and—

(a)     if it does, no further steps apply; or

(b)     if it does not, an instalment is due on D2 (“instalment 2 day”) and apply step 5.

 

(8)     Step 5 is to determine if the day (“D3”) which falls 3 months later than instalment 2 day falls before the final instalment day and only if it does is an instalment due on D3 (“instalment 3 day”)." (para 5AZA(3) - (8))

Amount of instalments

"(1)     The amount (“CTI”) which comprises a very large company's total liability for an accounting period (less any amount falling within regulation 5AZC or 5A) is due and payable on the instalment days set out in this regulation.

 

(2)     Where the only instalment day applies, all of CTI is due and payable on that day.

 

(3)     The amount due and payable on, if applicable—

(a)     instalment 1 day, is the lesser of CTI and the formula amount;

(b)     instalment 2 day and instalment 3 day, is the lesser of CTI-B and the formula amount; and

(c)     the final instalment day, is CTI-B.

 

(4)     In paragraph (3)—

“B” means the amount of CTI required to be paid on each previous instalment day; and

“the formula amount” means the amount produced by—

3 x (CTI / (wm + wmd))

where—

“wm” is the number of whole months falling within the accounting period;

“wmd” is the decimal (calculated to two places rounded arithmetically where necessary) of the fraction R/30, where “R” is the number of days in an accounting period outside the whole months represented by “wm”.

 

(5)     In this regulation the days listed in paragraph (6) have the same meaning in this regulation as they have in paragraph (2) or paragraphs (5) to (8), as the case may be, of regulation 5AZA, and “instalment days” in paragraph (1) means any of those days.

 

(6)     The days referred to in paragraph (5) are—

“the final instalment day”;

“instalment 1 day”, “instalment 2 day” and “instalment 3 day”; and

“the only instalment day”." (para 5AZB)

Companies subject to the bank levy or with ring fence profits

See paras 5AZC, 5A and 5B.

Instalments of corporation tax: very large companies

Meaning of large company (profit of £1.5m - £20m) and very large company (>£20m)

"(1)     Subject to paragraphs (3) to (5), a company (other than a relevant entity or a responsible member) is a large company by virtue of this regulation in respect of an accounting period if its profits in that period exceed £1.5 million but do not exceed £20 million." (SI 1998/3175, para 3(1))

(2)     Subject to paragraphs (3) and (4), a company (other than a relevant entity or a responsible member) is a very large company by virtue of this regulation in respect of an accounting period if its profits in that period exceed £20 million." (para 3(2))

Calculation of profit

"(9)     Except where paragraph (4) applies, whether a company is (or is not) a large company or a very large company by virtue of this regulation is to be determined as it would have been determined apart from sections 330 (supplementary charge in respect of ring fence trades) and 331 (meaning of “financing costs” etc) of CTA 2010." (para 3(9))

Adjustments for short accounting periods

"(10)     Where an accounting period is a period of less than 12 months, whether a company is (or is not) a large company or a very large company in respect of that period by virtue of this regulation is to be determined by making a proportionate reduction to the following amounts—

(a)     £10,000 in paragraph (4);

(b)     £1.5 million in paragraph (1) or £1.5 million/1+N in that paragraph where paragraph (8) applies;

(c)     £10 million in paragraph (5) or £10 million/1+N in that paragraph where paragraph (8) applies; and

(d)     £20 million in paragraphs (1) and (2) or £20 million/1+N in those paragraphs where paragraph (8) applies." (para 3(10))

Exclusion if not previously a large company and profit does not exceed £10m

"(5)     A company is not in respect of an accounting period (“AP”) a large company by virtue of this regulation where the profits of the company in AP do not exceed £10 million (or such amount as applies by virtue of paragraphs (8) and (10)) and—

(a)     during any part of the period (“AP-12”) of 12 months immediately preceding AP, the company did not exist or did not have an accounting period; or

(b)     in respect of any accounting period which fell within or ended in AP-12 the company was not—

(i)     a large company other than by reason of the operation of this paragraph, or

(ii)     a very large company." (para 3(5))

Exclusion if total liability does not exceed £10,000

"(4)     A company is not in respect of an accounting period—

(a)     a large company by virtue of paragraph (1); or

(b)     a very large company by virtue of paragraph (2),

if its total liability for the period does not exceed £10,000 (or such amount as applies by virtue of paragraph (10))" (para 3(4))

Special rules for group companies

"(6)     Paragraph (8) applies where a company has one or more related 51% group companies in an accounting period.

(7)     For the purposes of this regulation, the number (“N”) of related 51% group companies of a company in an accounting period (“AP”) is to be determined—

(a)     as the number existing at the end of the accounting period (“AP-1”) immediately preceding AP; or

(b)     where there is no AP-1 or AP-1 did not end on the day before AP commenced, as the number existing at the commencement of AP.

(8)     Where this paragraph applies by virtue of paragraph (6), whether a company is (or is not) a large company or a very large company in respect of an accounting period by virtue of this regulation is to be determined with the following modifications—

(a)     in paragraph (1), for “£1.5 million” substitute “£1.5 million/1+N”;

(b)     in paragraphs (1) and (2), for “£20 million” substitute “£20 million/1+N”; and

(c)     in paragraph (5), for “£10 million” substitute “£10 million/1+N,

but the amounts in sub-paragraphs (a), (b) and (c) are subject to the provisions in paragraph (10)." (para 3(6) - (8))

Meaning of large company (profit of £1.5m - £20m) and very large company (>£20m)

Claim for early repayment due to a change of circumstances (instalments)

 

"(1)     This regulation applies where a large company or very large company—

(a)     has paid an amount or amounts by way of instalments in respect of its total liability for an accounting period in accordance with these Regulations, and

(b)     subsequently has grounds for believing that, by reason of a change in the circumstances of the company since the payment or payments were made—

(i)     the amount of its total liability for that period is likely to be less than previously calculated, and

(ii)     the aggregate amount so paid exceeds the aggregate amount (“the revised aggregate amount”) that would have been treated as becoming due and payable by the relevant date having regard to the revised calculation of that liability.

 

(2)     The company may, by notice given to an officer of Revenue and Customs, make a claim to an officer of Revenue and Customs for the repayment of so much of the aggregate amount so paid as in the company's view exceeds the revised aggregate amount." (SI 1998/3175, para 6(1) - (2))

"(7)     In paragraph (1)(b) “the relevant date” means the date on which a claim under paragraph (2) is made." (para 6(7))

Content of notice

"(3)     The notice under paragraph (2) must state—

(a)     the amount which the company considers should be repaid, and

(b)     the grounds referred to in paragraph (1)(b)." (para 6(3))

Application to Tribunal for determination of repayment

"(4)     If the company has appealed against an amendment of an assessment, or an assessment, in respect of the amount of its total liability for the accounting period concerned, and the appeal has not been finally determined, it may apply to the [tribunal]1 to whom the appeal stands referred for a determination of the amount which should be repaid to the company pending determination of the amount of its total liability for that accounting period.

(5)     Any claim under paragraph (2) or application under paragraph (4) is to be subject to the relevant provisions of Part 5 of the Taxes Management Act 1970 (see, in particular, section 48(2)(b) of that Act)." (para 6(4) - (5))

Claim for early repayment due to a change of circumstances (instalments)

Allocate payments to bank levy first

 

"(1)     This regulation applies where—

(a)     an entity (E) is either—

(i)     the relevant entity; or

(ii)     the responsible member; and

(b)     there has been an underpayment of E's total liability for an applicable accounting period.

(2)     Any payment made by E in respect of that applicable accounting period shall be treated—

(a)     as a payment in respect of any amount of the bank levy which is unpaid for the applicable accounting period; and

(b)     to the extent that the payment exceeds the unpaid amount of the bank levy, as a payment in respect of corporation tax other than the bank levy for the applicable accounting period.

(3)     Whether there has been an underpayment of E's total liability shall be ascertained in accordance with the provisions of Schedule 18." (SI 1998/3175, para 6A)

Allocate payments to bank levy first

Information gathering relating to payment of corporation tax

 

See Chapter I2: Information powers (general)

Information gathering relating to payment of corporation tax
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