Guidance

Software developers: updates to the CT600 guidance and forms

Guidance intended to help HM Revenue and Customs (HMRC) software developers and substitute form producers to create their products.

Only for use by software developers and substitute form producers.

CT600 forms versions 2 and 3

HMRC publishes all the forms currently in use on these pages and identifies them by the letter ‘P’ in Draft Corporation Tax forms: summary for software developers.

To help you prepare your changes, drafts of forms not yet published, identified by the letter ‘D’, will appear in the table as soon as HMRC prepares them. No substitute forms should be published or brought into use based on drafts. HMRC asks you to wait until they publish the final versions, identified by the letter ‘P’ in the table, before seeking substitute approval and publishing your version.

Changes following 2017 Autumn Budget

Following the 2017 Autumn Budget, HMRC will be issuing a CT600 Budget Update and amending the CT600, CT600 guide and RIM artefacts. This page gives detail of the main changes that’ll affect a company’s Corporation Tax return and Self-Assessment.

Rates of Corporation Tax

For the financial year 2018, starting on 1 April 2018, the rate of Corporation Tax is 19%. The rates for ring fence profits are unchanged. For more information on rates and allowances see Rates and allowances: Corporation Tax.

The Corporation Tax (Northern Ireland) Act 2015 allows for devolution of power to the Northern Ireland Assembly to set a Northern Ireland rate of Corporation Tax to apply to certain trading income.

The government will commence the Act and devolution of the power can be completed once a restored Northern Ireland Executive demonstates its finances are on a sustainable footing.

Once the Act has been commenced, a separate rate can be set through a resolution agreed by the Northern Ireland Assembly, in advance of the tax year for which the rate is to apply.

Annual update to the Energy Technology List for capital allowances

Legislation will be introduced by statutory instrument to amend the list of technologies and products covered by the energy-saving First Year Allowance (FYA) scheme. It adds 3 new products, modifies 9 and removes 2 items from the list.

The schemes allow 100% of the cost of an investment in qualifying plant and machinery to be written off against the taxable income of the period in which the investment is made. This improves cash flow for businesses.

The changes to the scheme will have effect on and after a date to be appointed by Treasury Order, to be made immediately after Autumn Budget 2017.

No change to the CT600 return form or CT600 guide is required.

Annual update to the Energy Technology List for first year capital allowances

Disincorporation relief

At Budget 2013, the government introduced a disincorporation relief for 5 years from April 2013, which was legislated for in Finance Act 2013. The government has announced in Autumn Budget 2017 that the relief won’t be extended beyond the 31 March 2018 expiry date.

No change to the CT600 return form or CT600 guide is required.

Disincorporation Relief

Extension and reduction of First Year Tax Credit Scheme to 2023

Legislation will be introduced in Finance Bill 2017-18 to:

  • extend First Year Tax Credits (FYTC) until 31 March 2023
  • set the rate of eligible claims to two-thirds of the Corporation Tax (CT) rate

FYTC provide relief for loss-making businesses which purchase efficient technology supported by the energy and water schemes.

No change to the CT600 return form or CT600 guide is required.

Extend first year tax credits for 5 years and reduce the rate of claim

Renewing Enhanced Capital Allowances for zero emission vans and gas refuelling equipment

Legislation will be introduced by statutory instrument to extend, for a further 3 years, the 100% FYA for businesses purchasing zero-emission goods vehicles or gas refuelling equipment.

For zero-emission goods vehicles the three year extension will apply to qualifying expenditure incurred on or after 1 April 2018 for Corporation Tax (CT) and 6 April 2018 for Income Tax. The scheme will end on 31 March 2021 for CT and 5 April 2021 for Income Tax.

For gas refuelling equipment the three year extension will apply to expenditure incurred on or after 1 April 2018 for CT and Income Tax. The scheme will end on 31 March 2021 for both CT and Income Tax.

No change to the CT600 return form or CT600 guide is required.

Extension of first year allowances for zero-emission goods vehicles and gas refuelling equipment

Abolishing indexation allowance for corporates

Legislation will be introduced in Finance Bill 2017-18 to amend the indexation allowance rules in the Taxation of Chargeable Gains Act 1992.

For disposals of assets on or after 1 January 2018, indexation allowance must be calculated using the Retail Price Index or factor for December 2017, regardless of the date of disposal of the asset.

The CT600 guide will be amended to reflect this change.

Removal of capital gains indexation allowance from 1 January 2018

Capital Gain depreciatory transactions

Changes will be made in Finance Bill 2017-18 to section 176 Taxation of Chargeable Gains Act 1992.

The legislation will remove the time limit of 6 years for depreciatory transaction adjustments. These are adjustments a company must make on the sale of shares in a subsidiary company to account for earlier transactions that have materially reduced their value.

The measure will have effect for disposals of shares in, or securities of a company made on and after 22 November 2017.

For assets that are of negligible value, the commencement rule will apply to the date that the claim is made and not any earlier date that might be specified.

No change to the CT600 return form or CT600 guide is required.

Capital gains depreciatory transactions

Oil and Gas Taxation - transferrable tax history

As announced at Autumn Budget 2017, the government will legislate in Finance Bill 2018-19 to introduce transferable tax history for oil and gas companies. This follows publication of a discussion document at Spring Budget 2017 on tax issues for late-life oil and gas assets, and the creation of an expert panel to examine the issue. This change will have effect on and after 1 November 2018.

Changes to the CT600I supplementary page, CT600 guide and the CT600 RIM artefacts will be made in due course.

Research and Development (R&D) Tax Credits - increase in rate

Legislation will be included in Finance Bill 2017-18 to increase the tax relief for large companies (and small and medium sized enterprises in some cases) that carry out qualifying R&D and claim the Research and Development Expenditure Credit (RDEC).

RDEC (also known as the ‘Above the Line’ credit) is a standalone credit that’s brought into account as a receipt in calculating profits. The current general rate is set as 11% of qualifying R&D expenditure. The legislation will increase the rate of the RDEC from 11% to 12%.

The increase in the RDEC rate will have effect for expenditure incurred on or after 1 January 2018.

No change to the CT600 return form or CT600 guide is required.

Corporate interest restriction

The government will legislate in both ‘Finance Bill 2017-18’ and ‘Finance Bill 2018-19’ to make technical amendments to the corporate interest restriction rules. This will ensure the regime works as intended.

Amendments will be made to the:

  • rules about relevant derivative contract debits and credits to make sure that derivatives hedging a financial trade that isn’t a banking business aren’t inappropriately excluded from the rules
  • calculation of group-earnings before interest, tax, depreciation and amortisation (EBITDA), to align the treatment of RDECs with the approach taken in the calculation of tax-EBITDA
  • infrastructure rules, to make sure insignificant amounts of non-taxable income don’t affect their operation
  • infrastructure rules, so the time limit for making an election to be a qualifying infrastructure company (QIC) is changed to the last day of the accounting period where the election first applies
  • infrastructure rules, so a third party which acquires an asset from a QIC isn’t automatically treated as making an election to be a QIC
  • infrastructure rules, so the limitation on relief for related party interest can’t be avoided by using a conduit company to provide the finance
  • definition of a group, to align it with accounting standards and to make sure that asset managers don’t cause otherwise unrelated businesses to be grouped together
  • administrative rules, so when an interest restriction return is submitted, companies will be required to amend their company tax returns if their tax position is changed

Some of these amendments are treated as having effect on and after 1 April 2017, when the corporate interest restriction rules commenced. The remainder of the amendments have effect on and after 1 January 2018. For more information see Amendments to the corporate interest restriction rules.

No change to the CT600 return form or CT600 guide is required.

Other Changes

Payments for very large companies

This measure was first announced at Summer Budget 2015 on 8 July 2015 for accounting periods beginning on or after 1 April 2017. Following representations on draft secondary legislation, at Budget 2016 on 16 March 2016, it was announced that commencement would be deferred for 2 years. This was to allow businesses more time to transition to the new payment schedules. The measure is now effective for accounting periods beginning on or after 1 April 2019.

For accounting periods beginning on or after 1 April 2019, companies with annual taxable profits exceeding £20 million in an accounting period will be required to pay instalments of CT 4 months earlier. For a company with a 12 month accounting period, instalments will be due in months 3, 6, 9 and 12 of the period to which the liability relates.

Where the company is a member of one or more 51% groups, the threshold of £20 million will be divided by the number of related 51% group companies plus 1. A company is a related 51% company of another if either company is a 51% subsidiary of the other, or both are 51% subsidiaries of a third company.

Payment dates won’t change for companies with annual taxable profits of £20 million, or for the following specific charges:

  • bank levy
  • Corporation Tax and supplementary charge on ring fence profits

Changes to the CT600, CT600 guide and the CT600 RIM artefacts will be made in due course.

Substitute tax returns

Accurate facsimiles of the official Company Tax Return forms (based on the final paper format) can be accepted in accordance with Statement of Practice SP5/87. The design of substitute returns and supplementary pages must be centrally approved by HMRC before they’re marketed or brought into use.

Archived versions of Quark return forms can be found on the National Archives.

Draft versions of CT forms

HMRC provides draft versions of the developing Company Tax return forms and supplementary pages on the internet to help software developers and substitute form producers to create their products. These versions may be subject to some minor amendments during proof reading, but any changes will be shown in the final versions published on the website.

Draft versions have no legal status and aren’t in a prescribed form. They must not be used by companies to deliver their Company Tax returns.

If you have any comments you can contact:

Email: andrew.hughes@hmrc.gsi.gov.uk

Drafts are only available for software developers and substitute form producers.

Draft Corporation Tax forms: summary for software developers

Current Corporation Tax forms

Published 25 March 2015
Last updated 3 April 2018 + show all updates
  1. Following the 2017 Autumn Budget, this page has been updated to include detail of the main changes that will affect a company’s Corporation Tax return and Self-Assessment.
  2. Updates made following 2016 Autumn Statement announcement.
  3. Updates made following March 2016 Spring Budget announcement.
  4. Updates made following July 2015 Summer Budget announcement.
  5. First published.