Finance Act 2022

43 Allowance

(1) A company within the charge to corporation tax—

(a) is the allocating member of a group (“group G”) in respect of the allowance for an accounting period (“period A”) if it has been nominated to be the allocating member in accordance with regulations made under subsection (8), and

(b) if the company is an RP developer, may allocate some or all of the allowance for that period to itself.

(2) The allowance for period A to be allocated to members of group G is—

(a) where that period is 12 months, £25,000,000, and

(b) where that period is less than 12 months, £25,000,000 reduced by a pro rata amount.

(3) Where—

(a) an RP developer is a member of group G for an accounting period (“period B”),

(b) period B ends at the same time as, or during, period A, and

(c) the RP developer is a member of group G at the end of period A,

its allowance for period B is such amount (if any) as the allocating member of group G may allocate to it out of the allocating member’s allowance in respect of period A and as has not been allocated to another RP developer which is a member of group G.

(4) Where—

(a) an RP developer is a member of a group at any time in an accounting period, and

(b) an allocating member of the group has not been nominated for that period,

the RP developer’s allowance for that period is the amount determined in accordance with subsection (5).

(5) The amount is—

(a) where the accounting period is 12 months, £25,000,000 divided by the number of companies within the charge to corporation tax that are members of the group at the end of the accounting period of the ultimate parent of the group in which the end of the accounting period of the RP developer falls, and

(b) where the accounting period is less than 12 months, the sum determined under paragraph (a) reduced by a pro-rata amount.

(6) In any case not falling within the preceding subsections, an RP developer’s allowance for an accounting period is—

(a) where the accounting period is 12 months, £25,000,000, and

(b) where the accounting period is less than 12 months, £25,000,000 reduced by a pro-rata amount.

(7) A member of group G is entitled to an allowance in respect of period B only if—

(a) an allowance allocation statement has been submitted on behalf of the group in accordance with regulations under subsection (8), and

(b) the allowance in question is for the amount allocated to it in that statement.

(8) HMRC Commissioners may by regulations make provision for and about—

(a) the nomination of a company in a group to be the allocating member of the group;

(b) changing the allocating member of a group;

(c) the submission by the allocating member to HMRC of an allowance allocation statement specifying how much of its allowance in respect of period A it has allocated to a member of the group in respect of period B.

(9) Regulations under subsection (8) may, among other things, make provision about—

(a) the contents of an allowance allocation statement;

(b) when an allowance allocation statement is to be submitted;

(c) when and how an allowance allocation statement may or must be amended on behalf of a group;

(d) when and how an allowance allocation statement may be amended by an officer of Revenue and Customs;

(e) the amendment of company tax returns in consequence of an allowance allocation statement or any amendment to such a statement (including provision altering time limits that would otherwise apply);

(f) the consequences for any RP developer that is a member of a group of the group not having an allocating member.

(10) This section is subject to section 44.