835AAE Carry forward of total spare capacity

Summary

This section sets out the rules relating to the carry forward of amounts of total spare capacity.

Details

(1) A relevant entity can carry forward its total spare capacity forward for a period of 60 months from the end of the accounting period in which it arose. This period is referred to as the ‘relevant period’.

(2) Where a relevant entity incurs a disallowable amount in an accounting period during the relevant period, a claim can be made to reduce the disallowable amount by the total spare capacity carried forward from prior accounting periods.

(3) Where a claim is made under subsection (2), the disallowable amount for the accounting period concerned will be reduced by the amount of total spare capacity carried forward from previous accounting periods and any amount of total spare capacity not used to reduce the disallowable amount will be carried forward to subsequent accounting periods.

(4) Relief under subsection 2 must be given in respect of total spare capacity arising in earlier accounting periods in priority to relief for total spare capacity arising in later accounting periods.

(5) Where an accounting period and a relevant period do not coincide, the amount of total spare capacity which may be relieved against a disallowable amount is reduced by multiplying it by the fraction which equates to the length of the period common to the relevant period and accounting period over the length of the accounting period.

(6) To determine the amount of relief available for total spare capacity, the amount is reduced by the amount of any claims previously made under this section, or under subsections (3), (8) or (10) of section 835AAD.

Relevant Date: Finance Act 2021