The Corporation Tax (Financing Costs and Income) Regulations 2009

CHAPTER 3 FAILURE OF REPORTING BODY TO SUBMIT A STATEMENT OF ALLOCATED DISALLOWANCES

Reduction of financing expense amounts

15.—(1) The financing expense amounts of a company that must be reduced under paragraph 25(2) of Schedule 15 must be reduced in the following order until the amount of the reduction is equal to the amount determined under paragraph 25(3) of that Schedule.

First, reduce any amounts that meet condition A in paragraph 54(2) of Schedule 15 and would be brought into account in respect of a loan relationship under Part 5 of the Corporation Tax Act 2009(1) (other loan relationships).

Second, reduce any other amounts that meet condition A in paragraph 54(2) of Schedule 15.

Third, reduce any amounts that meet condition B in paragraph 54(4) of Schedule 15.

Fourth, reduce any amounts that meet condition C in paragraph 54(5) of Schedule 15.

(2) But a company required to make reductions under paragraph 25 of Schedule 15 may elect to make such reductions differently.

(3) An election under paragraph (2)—

(a) must be made in the company’s tax return,

(b) must specify the particular reductions made, and

(c) may be withdrawn, with or without making a new election, at any time that the company may amend its company tax return under paragraph 15(4) of Schedule 18 to the Finance Act 1998.

(4) A company required to make reductions under paragraph 25 of Schedule 15 must notify its ultimate UK parent of the particular reductions made.

(5) A notice under paragraph (4) must be made no later than the date on which the company delivers its company tax return and must be accompanied by—

(a) any election made under paragraph (2), and

(b) details of any error made by the company in calculating its net financing deduction for the relevant period together with the correct amount.

Information to be provided in relation to a company required to make default reductions

16.—(1) An ultimate UK parent must send a company required to make default reductions details of the amounts of—

(a) the tested expense amount, and

(b) the total disallowed amount,

for the worldwide group for the relevant period of account.

(2) The information in paragraph (1) must be supplied to the company required to make default reductions before the filing date for the company’s tax return (see paragraph 14 of Schedule 18 to the Finance Act 1998(2)).

Non-compliance

17.—(1) If an ultimate UK parent does not provide the information specified by regulation 16 within the requisite time period, HMRC must determine to the best of their information and belief the amounts of the tested expense amount and the total disallowed amount for the worldwide group for the relevant period of account.

(2) A notice of determination under this regulation must be sent to the company required to make the default reduction and to the ultimate UK parent stating the date on which the determination is issued.

(3) No determination under this regulation may be made more than 3 years after the day on which the power becomes exercisable.

(4) If after a determination has been made under this regulation, the ultimate UK parent provides the information specified by regulation 16, that information shall supersede the determination.

(5) But paragraph (4) does not apply if the information is supplied more than 3 years after the determination is made.

Amendment of tax return by company

18.—(1) A company required to make default reductions may amend its company tax return so as to reflect a reduction under paragraph 25 of Schedule 15 within 3 years of the end of the relevant period of account.

(2) But where one of the following circumstances applies the company may amend its tax return at any time before the specified date.

Circumstance 1

Where there is an enquiry into the company tax return of the company, the specified date is the last of the following dates—

(a) 30 days after the enquiry is completed;

(b) if after the enquiry HMRC amend the return under paragraph 34(2) of Schedule 18 to the Finance Act 1998, 30 days after notice of the amendment is issued;

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

Circumstance 2

Where a determination under paragraph 36 of Schedule 18 to the Finance Act 1998 is made in relation to the company which is superseded by a self-assessment in accordance with paragraph 40 of that Schedule, the specified date is 30 days after delivery of the company tax return.

Circumstance 3

Where a discovery assessment or discovery determination is made under paragraph 41 of Schedule 18 to the Finance Act 1998 in relation to the company, the specified date is the last of the following dates—

(d) 30 days after the discovery assessment or discovery determination is made,

(e) if an appeal is brought against such the discovery assessment or discovery determination, 30 days after the date on which the appeal is finally determined.

Circumstance 4

Where a determination under regulation 17 is made in relation to the company which is superseded by the provision of information under paragraph (4) of that regulation, the specified date is 30 days after the provision of that information.

(1)

2009 c. 4.

(2)

1998 c. 36.