Revenue Note for Guidance

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Revenue Note for Guidance

243B Relief for certain charges on income on a value basis

Summary

This section provides relief for certain charges on income on a value basis. It provides relief for relevant trading charges on income (i.e. charges on income paid for the purposes of a trade the income from which is taxable at the standard corporation tax rate) paid in an accounting period which have not otherwise been relieved. This is done by reducing corporation tax for the accounting period by an amount determined by applying the relevant corporation tax rate to the amount of the unrelieved charges on income.

Details

Definitions

(1) “relevant corporation tax” is the corporation tax which can be reduced by the new relief. It is the corporation tax which would be chargeable for the accounting period apart from:

relevant trading charges on income” means charges on income paid wholly and exclusively for the purposes of a trade carried on by the company the income from which is taxable at the standard corporation tax rate.

The relief

(2) Where the amount of relevant trading charges on income paid by a company in an accounting period exceeds amounts allowed as deductions against income of the company (under section 243A), the company can claim relief in respect of the excess on a value basis.

(3) Where a company claims relief under this section in respect of the excess, the relevant corporation tax for the accounting period is to be reduced by an amount determined by applying the standard rate to those ”relevant trading charges”.

Carry forward of unused amounts

(4) Special rules apply to determine the amount of the charges which are to be regarded as having been used for the purposes of the carry forward of losses. The amount of charges which are regarded as having been used is determined by regrossing the relief given at the standard corporation tax rate.

Relevant Date: Finance Act 2021