Finance Act 1998 (c. 36) (c. 36)

(The document as of February, 2008)

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(2) The amount specified must be an amount which is quantified at the time the claim is made.

Claims for more or less than the amount available for surrender

69 (1) A claim for group relief may be made for less than the amount available for surrender at the time the claim is made.

(2) A claim is ineffective if the amount claimed exceeds the amount available for surrender at the time the claim is made.

(3) For these purposes the amount available for surrender at any time is calculated as follows.

First step

Determine the total amount available for surrender under section 403 of the Taxes Act 1988--

(a) on the basis of the information in the company's company tax return, and

(b) disregarding any amendments whose effect is deferred under paragraph 31(3).

Second step

Then deduct the total of all amounts for which notices of consent have been given by the company and not withdrawn.

(4) Where one or more claims are withdrawn on the same day as one or more claims are made, the withdrawals are given effect first.

(5) Where more than one claim is made on the same day, and the claims together take the amount claimed over the limit of what is available for surrender, the Inland Revenue may determine which of the claims is to be ineffective.

(6) The power under sub-paragraph (5) shall not be exercised to any greater extent than is necessary to bring the total amount claimed within the amount available for surrender.

Consent to surrender

70 (1) A claim for group relief requires the consent of the surrendering company.

(2) A consortium claim also requires the consent of each member of the consortium.

(3) The necessary consent or consents must be given--

(a) by notice in writing,

(b) to the officer of the Board to whom the surrendering company makes its company tax returns,

Otherwise the claim is ineffective.

(4) A claim for group relief is ineffective unless it is accompanied by a copy of the notice of consent to surrender given by the surrendering company.

(5) A consortium claim is ineffective unless it is also accompanied by a copy of the notice of consent to surrender given by each member of the consortium.

Notice of consent

71 (1) Notice of consent by the surrendering company must contain all the following details--

(a) the name of the surrendering company;

(b) the name of the company to which relief is being surrendered;

(d) the accounting period of the surrendering company to which the surrender relates;

(e) the tax district references of the surrendering company and the company to which relief is being surrendered.

Otherwise the notice is ineffective.

(2) Notice of consent may not be amended, but it may be withdrawn and replaced by another notice of consent.

(3) Notice of consent may be withdrawn by notice to the officer of the Board to whom the notice of consent was given.

(4) Except where the consent is withdrawn under paragraph 75 (withdrawal in consequence of reduction of amount available for surrender), the notice of withdrawal must be accompanied by a notice signifying the consent of the claimant company to the withdrawal.

Otherwise the notice is ineffective.

(5) The claimant company must, so far as it may do so, amend its company tax return for the accounting period for which the claim was made so as to reflect the withdrawal of consent.

Notice of consent requiring amendment of return

72 (1) Where notice of consent by the surrendering company is given after the company has made a company tax return for the period to which the surrender relates, the surrendering company must at the same time amend its return so as to reflect the notice of consent.

(2) Where notice of consent by the surrendering company relates to a loss in respect of which relief has been given under section 393(1) of the Taxes Act 1988 (carry forward of trading losses), the surrendering company must at the same time amend its company tax return for the period or, if more than one, each of the periods in which relief for that loss has been given under section 393(1) so as to reflect the new notice of consent.

For this purpose relief under section 393(1) is treated as given for losses incurred in earlier accounting periods before losses incurred in later accounting periods.

(3) The time limits otherwise applicable to amendment of a company tax return do not prevent an amendment being made under sub-paragraph (1) or (2).

(4) If the surrendering company fails to comply with sub-paragraph (1) or (2), the notice of consent is ineffective.

Withdrawal or amendment of claim

73 (1) A claim for group relief may be withdrawn by the claimant company only by amending its company tax return.

(2) A claim for group relief may not be amended, but must be withdrawn and replaced by another claim.

Time limit for claims

74 (1) A claim for group relief may be made or withdrawn at any time up to whichever is the last of the following dates--

(a) the first anniversary of the filing date for the company tax return of the claimant company for the accounting period for which the claim is made;

(b) if notice of enquiry is given into that return, 30 days after the enquiry is completed;

(c) if after such an enquiry the Inland Revenue amend the return under paragraph 34(2), 30 days after notice of the amendment is issued;

(d) if an appeal is brought against such an amendment, 30 days after the date on which the appeal is finally determined.

(2) A claim for group relief may be made or withdrawn at a later time if the Inland Revenue allow it.

(3) The time limits otherwise applicable to amendment of a company tax return do not apply to an amendment to the extent that it makes or withdraws a claim for group relief within the time allowed by or under this paragraph.

(4) The references in sub-paragraph (1) to an enquiry into a company tax return do not include an enquiry restricted to a previous amendment making or withdrawing a claim for group relief.

An enquiry is so restricted if--

(a) the scope of the enquiry is limited as mentioned in paragraph 25(2), and

(b) the amendment giving rise to the enquiry consisted of the making or withdrawing of a claim for group relief.

Reduction in amount available for surrender

75 (1) This paragraph applies if, after the surrendering company has given one or more notices of consent to surrender, the amount available for relief is reduced to less than the amount stated in the notice, or the total of the amounts stated in the notices, as being surrendered.

(2) The company must within 30 days withdraw the notice of consent, or as many of the notices as is necessary to bring the total amount surrendered within the new amount available for surrender, and may give one or more new notices of consent.

(3) The company must give notice in writing of the withdrawal of consent, and send a copy of any new notice of consent--

(a) to each of the companies affected, and

(b) to the Inland Revenue.

(4) If the surrendering company fails to act in accordance with sub-paragraph (2), the Inland Revenue may by notice to the surrendering company give such directions as they think fit as to which notice or notices are to be ineffective or are to have effect in a lesser amount.

This power shall not be exercised to any greater extent than is necessary to secure that the total amount stated in the notice or notices is consistent with the amount available for surrender.

(5) The Inland Revenue must at the same time send a copy of the notice to the claimant company, or each claimant company, affected by their action.

(6) A claimant company which receives--

(a) notice of the withdrawal of consent, or a copy of a new notice of consent, under sub-paragraph (3), or

(b) a copy of a notice containing directions by the Inland Revenue under sub-paragraph (4),

must, so far as it may do so, amend its company tax return for the accounting period for which the claim is made so that it is consistent with the new position with regard to consent to surrender.

(7) An appeal may be brought by the surrendering company against any directions given by the Inland Revenue under sub-paragraph (4).

(8) Notice of appeal must be given--

(a) in writing,

(b) within 30 days after the notice containing the directions was issued,

Assessment to recover excessive group relief

76 (1) If the Inland Revenue discover that any group relief which has been given is or has become excessive, they may make an assessment to tax in the amount which in their opinion ought to be charged.

(2) This power is without prejudice to--

(a) the power to make a discovery assessment under paragraph 41(1);

(b) the making of all such adjustments by way of discharge or repayment of tax or otherwise as may be required where a claimant company has obtained too much relief, or a surrendering company has forgone relief in respect of a corresponding amount.

Joint amended returns

77 (1) The Treasury may by regulations make provision for arrangements under which--

(a) a claim for group relief may be made without being accompanied by a copy of the notice of consent to surrender given by the surrendering company, and

(b) one company may be authorised to act on behalf of two or more companies in the same group in amending their company tax returns for the purpose of claiming or surrendering group relief or revising the amounts of group relief claimed or surrendered by them.

(2) Regulations under this paragraph may add to, exclude or modify the operation of any provisions of this Part of this Schedule to such extent as the Treasury think necessary or expedient for the purpose of, or in connection with, such arrangements.

(3) Provision may in particular be made--

(a) altering the conditions for making and withdrawing claims for group relief, and

(b) giving the Inland Revenue power to recover from the authorised company or another company in the group any amount which might be recovered from the claimant company by an assessment under paragraph 76.

Part IX Claims for capital allowances

Introduction

78 This Part of this Schedule applies to claims for capital allowances, that is, allowances under the [1990 c. 1.] Capital Allowances Act 1990 or provisions to which the Tax Acts apply as if they were contained in that Act.

Claim to be included in company tax return

79 (1) A claim for capital allowances must be made by being included in the claimant company's company tax return for the accounting period for which the claim is made.

(2) It may be included in the return originally made or by amendment.

Content of claims

80 A claim for capital allowances must specify the amount claimed, which must be an amount which is quantified at the time the claim is made.

Amendment or withdrawal of claim

81 A claim for capital allowances may be amended or withdrawn by the claimant company only by amending its company tax return.

Time limit for claims

82 (1) A claim for capital allowances may be made, amended or withdrawn at any time up to whichever is the last of the following dates--

(a) the first anniversary of the filing date for the company tax return of the claimant company for the accounting period for which the claim is made;

(b) if notice of enquiry is given into that return, 30 days after the enquiry is completed;

(c) if after such an enquiry the Inland Revenue amend the return under paragraph 34(2), 30 days after notice of the amendment is issued;

(d) if an appeal is brought against such an amendment, 30 days after the date on which the appeal is finally determined.

(2) A claim for capital allowances may be made, amended or withdrawn at a later time if the Inland Revenue allow it.

(3) The time limits otherwise applicable to amendment of a company tax return do not apply to an amendment to the extent that it makes, amends or withdraws a claim for capital allowances within the time allowed by or under this paragraph.

(4) The references in sub-paragraph (1) to an enquiry into a company tax return do not include an enquiry restricted to a previous amendment making, amending or withdrawing a claim for capital allowances.

An enquiry is so restricted if--

(a) the scope of the enquiry is limited as mentioned in paragraph 25(2), and

(b) the amendment giving rise to the enquiry consisted of the making, amending or withdrawing of a claim for capital allowances.

Consequential amendment of return for another accounting period

83 (1) This paragraph applies if the effect of a claim for capital allowances is to reduce the amount available by way of capital allowances for another accounting period of the company for which a company tax return has been delivered.

(2) The company has 30 days within which to make any necessary amendments of the company tax return for that other period.

(3) If it does not do so, the Inland Revenue may by notice in writing to the company amend the return to make it consistent with the amount available by way of capital allowances.

(4) The time limits otherwise applicable to amendment of a company tax return do not prevent an amendment being made under sub-paragraph (2) or (3).

(5) An appeal may be brought by the company against any such amendment.

(6) Notice of appeal must be given--

(a) in writing,

(b) within 30 days after notice of the amendment was issued,

Part X Special provisions

Choice between different Cases of Schedule D

84 (1) This paragraph applies in the following cases.

(2) The first case is where amounts may be brought into charge to tax either--

(a) in computing profits chargeable to tax under Case I of Schedule D, or

(b) as amounts within Case III or V of that Schedule.

(3) The second case is where amounts may be brought into charge to tax either--

(a) in computing profits charged to tax under Case I of Schedule D, or

(b) for the purpose of applying the basis commonly called the I minus E basis under which a company carrying on life assurance business is charged to tax on that business otherwise than under Case I of Schedule D.

In paragraph (b) "life assurance business" includes annuity business within the meaning of Chapter I of Part XII of the Taxes Act 1988.

(4) Where this paragraph applies, the Inland Revenue may by notice require a company--

(a) to produce to them such documents in the company's power or possession, and

(b) to provide them with such information, in such form,

as they may reasonably require for the purpose of determining which basis of charge is to be used for an accounting period.

The provisions of paragraphs 27 to 29 (notice to produce documents, etc. for purposes of enquiry: supplementary provisions and penalty) apply in relation to such a notice.

(5) A determination by the Inland Revenue under this paragraph is final and conclusive as to the basis of charge to be used for the accounting period concerned.

Non-annual accounting of general insurance business

85 (1) This paragraph applies where a company carrying on insurance business delivers a company tax return based wholly or partly on accounts drawn up using the method described in paragraph 52 of Schedule 9A to the [1985 c. 6.] Companies Act 1985.

That paragraph provides for a technical provision to be made in the accounts which is later replaced by a provision for estimated claims outstanding.

(2) Where this paragraph applies--

(a) the company may make any amendments of its return arising from the replacement of the technical provision at any time within twelve months from the date on which the provision was replaced, and

(b) the Inland Revenue may give notice of enquiry into the return at any time up to two years from that date.

(3) Nothing in this paragraph prevents notice of enquiry being given at any later time in accordance with the general rule in paragraph 24(3).

Insurance companies with non-annual actuarial investigations

86 (1) This paragraph applies where a company tax return is delivered by an insurance company which is permitted by an order under section 68 of the [1982 c. 50.] Insurance Companies Act 1982 to cause investigations to be made into its financial condition less frequently than is required by section 18 of that Act.

(2) Where this paragraph applies--

(a) the company may make any amendments of its return arising from the relevant investigation at any time within twelve months from the date as at which that investigation is carried out, and

(b) the Inland Revenue may give notice of enquiry into the return at any time up to two years from that date.

(3) "The relevant investigation" means--

(a) if the return is for a period as at the end of which there is carried out an investigation under section 18 of the [1982 c. 50.] Insurance Companies Act 1982 into the financial condition of the company, that investigation;

(b) if the return is not for such a period, the first such investigation to be made into the financial condition of the company as at the end of a subsequent period.

Friendly societies with non-annual actuarial investigations

87 (1) This paragraph applies where a company tax return is delivered by a friendly society which is required by section 47 of the [1992 c. 40.] Friendly Societies Act 1992 to cause an investigation to be made into its financial condition at least once in every period of three years.

(2) Where this paragraph applies--

(a) the society may make any amendments of its return arising from the relevant investigation at any time within 15 months from the date as at which that investigation is carried out, and

(b) the Inland Revenue may give notice of enquiry into the return at any time up to 27 months from that date.

(3) "The relevant investigation" means--

(a) if the return is for a period as at the end of which there is carried out an investigation under section 47 of the [1992 c. 40.] Friendly Societies Act 1992 into the financial condition of the society, that investigation;

(b) if the return is not for such a period, the first such investigation to be made into the financial condition of the company as at the end of a subsequent period.

Part XI Supplementary provisions

Conclusiveness of amounts stated in return

88 (1) This paragraph applies to an amount stated in a company tax return for an accounting period which is required to be included in the return and which affects or may affect--

(a) the tax payable by the company making the return for another accounting period, or

(b) the tax liability of another company for any accounting period.

(2) If such an amount can no longer be altered it is taken to be conclusively determined for the purposes of the Corporation Tax Acts in relation to that other period or other company.

Sub-paragraphs (3) to (5) explain what is meant by " can no longer be altered " .

(3) An amount is regarded as one that can no longer be altered if--

(a) the period specified in paragraph 15(4) (general period for amendment by company) has ended,

(b) any enquiry into the return has been completed and the period specified in paragraph 34(1) (period for amendment by company after enquiry) has ended,

(c) if the Inland Revenue amend the return under paragraph 34(2), the period within which an appeal may be brought against that amendment has ended, and

(d) if an appeal is brought, the appeal has been finally determined.

(4) If the return is amended by the company under a provision that allows an amendment after the end of the period specified in paragraph 15(4), an amount affected by the amendment ceases to be regarded as one that can no longer be altered until after whichever is the last of the following--

(a) the end of the period within which notice of enquiry into the return may be given in consequence of the amendment;

(b) if such a notice is given, the end of the period specified in paragraph 34(1);

(c) if the Inland Revenue amend the return under paragraph 34(2), the end of the period within which an appeal against that amendment may be brought;

(d) if an appeal is brought, the date on which the appeal is finally determined.

(5) If the return is amended by the Inland Revenue under paragraph 83(3) (consequential amendment of return where amount available by way of capital allowances is reduced), an amount affected by the amendment ceases to be regarded as one that can no longer be altered until after--

(a) the end of the period within which an appeal against that amendment may be brought, or

(b) if an appeal is brought, the date on which the appeal is finally determined.

(6) For the purposes of this paragraph an amount carried forward from a period for which a return was made under section 11 of the [1970 c. 9.] Taxes Management Act 1970 is not regarded as one required to be included in a company tax return for a later period.

(7) Nothing in this paragraph affects any power to make an assessment other than a self-assessment or the power to make a discovery determination.

Penalty for fraud or negligence

89 (1) A company which fraudulently or negligently--

(a) makes any incorrect return, statement or declaration in connection with a claim for any allowance, deduction or relief in respect of tax, or

(b) submits to the Inland Revenue, or to the Special or General Commissioners, any incorrect accounts in connection with ascertainment of the company's tax liability,

is liable to a tax-related penalty.

(2) The penalty is an amount not exceeding the amount of tax understated, that is, the difference between--

(a) the amount of tax payable by the company for the accounting period or periods to which the claim or accounts relate, and

(b) the amount which would have been so payable on the basis of the return, statement or declaration made, or the accounts submitted.

(3) In computing for this purpose the amount of tax payable, no account shall be taken of any relief under section 419(4) of the Taxes Act 1988 (relief in respect of repayment, etc. of loan) which is deferred under subsection (4A) of that section.

(4) For the purposes of this paragraph any accounts submitted on behalf of a company shall be taken to be submitted by it unless the company proves that they were submitted without its consent or connivance.

Multiple tax-related penalties in respect of same accounting period

90 (1) This paragraph applies where a company incurs more than one penalty whose amount falls to be determined by reference to the tax payable by it for an accounting period.

(2) Each penalty after the first shall be reduced so that the total amount of the penalties, so far as determined by reference to any particular part of the tax, does not exceed whichever is, or but for this paragraph would be, the greater or greatest of them, so far as so determined.

European Economic Interest Groupings

91 An act or omission such as is mentioned in section 98B of the [1970 c. 9.] Taxes Management Act 1970 (European Economic Interest Groupings: acts or omissions attracting penalties) on the part of a grouping, or a member of a grouping, is treated as the act or omission of each member of the grouping for the purposes of--

paragraphs 43 and 46(2) (assessment in case of fraud or negligence), and
paragraphs 61(2) and 65(1) (consequential claims in case of such an assessment).

Notices of appeal

92 (1) This paragraph applies in relation to any appeal under this Schedule.

(2) The notice of appeal shall specify the grounds of appeal.

(3) On the hearing of the appeal the Commissioners may allow the appellant to put forward grounds not specified in the notice, and take them into consideration, if satisfied that the omission was not wilful or unreasonable.

General jurisdiction of Special or General Commissioners

93 (1) This paragraph applies in relation to an appeal against--

(a) an amendment of a self-assessment under paragraph 30, or

(b) an amendment of a company tax return under paragraph 34(2), or

(d) a discovery determination.

(2) An appeal against a decision of the Board shall be to the Special Commissioners.

(3) Any other appeal shall be to the General Commissioners, subject--

(a) to any provision made by or under Part V of the [1970 c. 9.] Taxes Management Act 1970, and

(b) to any election under paragraph 94 below.

Election to take appeal to Special Commissioners

94 (1) The appellant may elect (in accordance with section 46(1) of the [1970 c. 9.] Taxes Management Act 1970) to bring an appeal to which paragraph 93(3) would otherwise apply before the Special Commissioners.

(2) Such an election shall be disregarded if--

(a) the appellant and the Inland Revenue agree in writing, at any time before the determination of the appeal, that it is to be disregarded, or

(b) the General Commissioners have given a direction under sub-paragraph (4) and have not revoked it.

(3) At any time before the determination of an appeal in respect of which an election has been made, the inspector or other officer of the Board for the time being concerned with the proceedings, after giving notice to the appellant, may refer the election to the General Commissioners.

(4) On any such reference the Commissioners shall, unless they are satisfied that the appellant has arguments to present or evidence to adduce on the merits or the appeal, direct that the election be disregarded.

(5) If, at any time before the giving of such a direction (but before the determination of the appeal) the General Commissioners are satisfied that the appellant has arguments to present or evidence to adduce on the merits of the appeal, they shall revoke the direction.

(6) Any decision to give or revoke such a direction shall be final.

Meaning of "the Inland Revenue"

95 (1) References in this Schedule to "the Inland Revenue" are to any officer of the Board, except as otherwise provided.

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