Revenue Note for Guidance

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Revenue Note for Guidance

959AT Date for payment of corporation tax: groups

Summary

This section allows for credit within groups for excess preliminary tax paid by one company against the preliminary tax liability of another. The section sets out the conditions for the surrendering and claimant companies. In general, this facility is available to larger companies that pay preliminary tax in two instalments.

Details

This subsection redefines the initial balance and final balance in the context of groups.

Relief under this section may be given where a group company (referred to as the surrendering company) pays:

  • an initial payment in excess of the 45% / 50% limits set out in section 959AS(2) or
  • an amount of preliminary tax for the period in excess of the 90% limits, set out in section 959AS(2) or 959AR, as applicable

and

Another group company who is not a small company (referred to as the claimant company) pays:

  • an initial payment which is less than the 45% / 50% limits set out in section 959AS(2) or
  • an amount of preliminary tax for the period which is less than the 90% limit set out in section 959AS(2)

The two companies may, before the specified return date, jointly give notice to the Collector-General that they wish to claim relief under this section

The excess preliminary tax paid by the surrendering company is deemed, for the purposes of this section, to have been paid by the claimant company for the purposes of section 959AS(4)(b), as far as it relates to the initial payment, or section 959AS(4)(d) as far as it relates to the final payment.

The claimant company must pay their full tax liability by the specified return date, disregarding this relief (which is a deemed payment and not an actual transfer or payments)

Should the claimant company pay the surrendering company for any amount surrendered under this amount, such an amount would not be taxable income, a distribution or a charge on income.

Where relief is claimed under this section, the amount of underpaid tax / preliminary tax on which interest arises under section 1080 is reduced by the deemed ‘offset’.

Group in this section has the same meaning as in section 411.

Relevant Date: Finance Act 2021