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Finance Act 1998

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8(1)The amount of tax payable for an accounting period is calculated as follows.U.K.

  • First step

    Calculate the corporation tax chargeable on the company’s profits:

    1

    Take the amount of the company’s profits for that period on which corporation tax is chargeable [F1(see section 4(1) and (2) of the Corporation Tax Act 2010)].

    2

    Apply the rate or rates of corporation tax applicable to the company [F2(other than the restitution payments rate)].

  • Second step

    Then give effect to any reliefs or set-offs available against corporation tax chargeable on profits:

    1

    Any reduction under [F3Part 3A or Chapter 3A of Part 8 of the Corporation Tax Act 2010 (marginal relief for companies with small profits)].

    1A

    [F4Any relief under Part V of Schedule 15 to the Finance Act 2000 (corporate venturing scheme: investment relief).]

    1B

    [F5Any relief under [F6Part 7 of the Corporation Tax Act 2010] (community investment tax relief).]

    2

    Any double taxation relief under [F7under sections 2 and 6 of TIOPA 2010 or under section 18(1)(b) and (2) of that Act].

    3

    Any set off for advance corporation tax under section 239 of [F8the Taxes Act 1988] or under regulations made under section 32 of this Act.

  • Third step

    Then add any amounts assessable or chargeable as if they were corporation tax (reduced by any reliefs specific to those amounts):

    1

    Any amount due under [F9section 455 [F10or 464A] of the Corporation Tax Act 2010] (tax on a loan[F11, advance or benefit] to a participator).

    1ZA

    [F12Any sum chargeable under section 269DA of that Act (surcharge on banking companies).]

    1A

    [F13Any sum chargeable under [F14section 330(1)] of that Act (supplementary charge in respect of ring fence trades).]

    2

    [F15Any sum charged at step 5 in section 371BC(1) of the Taxation (International and Other Provisions) Act 2010 (controlled foreign companies).]

    3

    [F16Any amount of the bank levy chargeable by virtue of paragraph 50 or 51 of Schedule 19 to the Finance Act 2011 (the bank levy).]

    4

    [F17Any amount of residential property developer tax chargeable by virtue of section 33 of the Finance Act 2022.]

    5

    [F18Any amount chargeable by virtue of section 1 of the Energy (Oil and Gas) Profits Levy Act 2022.]

  • Fourth step

    Then deduct any amounts to be set off against the company’s overall tax liability for that period:

    1

    Any amount to be set off under [F19section 967 or 968 of the Corporation Tax Act 2010] (income tax borne by deduction).

    2

    Any amount to be set off under section 246N or 246Q of [F20the Taxes Act 1988] (advance corporation tax paid in respect of foreign income dividend).

  • [F21Fifth step

    Calculate the corporation tax chargeable on any profits of the company that are charged as restitution interest.

    1

    Find the amount in respect of which the company is chargeable for the period under the charge to corporation tax on income under Part 8C of CTA 2010.

    2

    Apply the restitution payments rate in accordance with section 357YK(1) of that Act.

    The amount of tax payable for the accounting period is the sum of the amounts resulting from the first to fourth steps and this step.]

[F22(1A)Sub-paragraph (1B) applies if an amount of the bank levy chargeable by virtue of paragraph 50 or 51 of Schedule 19 to the Finance Act 2011 (the bank levy) is added at the third step.

(1B)Any deductions made at the fourth step are to be treated as made from all other amounts before being made from the amount of the bank levy.]

(2)Except as otherwise provided, references in this Schedule to the amount of tax payable by a company for an accounting period are to the amount shown in the company’s self-assessment as the amount payable.

Textual Amendments

F1Words in Sch. 18 para. 8(1) inserted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 297(4)(a) (with Sch. 2)

F2Words in Sch. 18 para. 8 inserted (with effect in accordance with s. 38(9)-(12) of the amending Act) by Finance (No. 2) Act 2015 (c. 33), s. 38(5)(a)

F3Words in Sch. 18 para. 8(1) substituted (with effect in accordance with Sch. 1 para. 34 of the amending Act) by Finance Act 2021 (c. 26), Sch. 1 para. 12

F4Words in Sch. 18 para. 8(1) inserted (28.7.2000 with application as mentioned in s. 63(4) of the amending Act) by 2000 c. 17, s. 63(2), Sch. 16 para. 5(2)

F5Words in Sch. 18 para. 8(1) inserted (24.7.2002 with effect as mentioned in s. 57(4)(c) of the amending Act) by 2002 c. 23, s. 57, Sch. 17 para. 5

F6Words in Sch. 18 para. 8(1) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 297(4)(c) (with Sch. 2)

F7Words in Sch. 18 para. 8(1) substituted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 8 para. 54(2)(a) (with Sch. 9 paras. 1-9, 22)

F8Words in Sch. 18 para. 8(1) substituted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 8 para. 54(2)(b) (with Sch. 9 paras. 1-9, 22)

F9Words in Sch. 18 para. 8(1) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 297(4)(d) (with Sch. 2)

F10Words in Sch. 18 para. 8(1) inserted (retrospective to 20.3.2013) by Finance Act 2013 (c. 29), Sch. 30 para. 13(3)(a)(5)

F11Words in Sch. 18 para. 8(1) substituted (retrospective to 20.3.2013) by Finance Act 2013 (c. 29), Sch. 30 para. 13(3)(b)(5)

F12Words in Sch. 18 para. 8(1) inserted (with effect in accordance with Sch. 3 Pt. 3 of the amending Act) by Finance (No. 2) Act 2015 (c. 33), Sch. 3 para. 3(3)

F13Words in Sch. 18 para. 8(1) inserted (24.7.2002) by 2002 c. 23, s. 92(4)

F14Words in Sch. 18 para. 8(1) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 297(4)(e) (with Sch. 2)

F15Words in Sch. 18 para. 8(1) substituted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 20 para. 17(3) (with Sch. 20 para. 50(9))

F16Words in Sch. 18 para. 8(1) inserted (19.7.2011) by Finance Act 2011 (c. 11), Sch. 19 para. 63(2)

F17Words in Sch. 18 para. 8(1) inserted (in relation to accounting periods beginning on or after 1.4.2022) by Finance Act 2022 (c. 3), s. 51(1), Sch. 8 para. 2(4)

F19Words in Sch. 18 para. 8(1) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 297(4)(g) (with Sch. 2)

F20Words in Sch. 18 para. 8(1) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 297(4)(h) (with Sch. 2)

F21Words in Sch. 18 para. 8 inserted (with effect in accordance with s. 38(9)-(12) of the amending Act) by Finance (No. 2) Act 2015 (c. 33), s. 38(5)(b)

F22Sch. 18 para. 8(1A)(1B) inserted (19.7.2011) by Finance Act 2011 (c. 11), Sch. 19 para. 63(3)

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