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HMRC internal manual

Bank Levy Manual

Collection and management: payment: anti-avoidance provisions

Regulation 5B of The Corporation Tax (Instalment Payments) Regulations (SI1998/3175) - inserted by SI2011/1785

The process for determining the responsible member, should in the majority of cases lead to the responsible member returning and paying the bank levy in an accounting period that both starts and ends on the same day as the chargeable period.

However, in some exceptional circumstances this may not be possible.

Where a relevant group has not got any UK group members that prepare accounts for the same period of account as the group financial statements, the legislation will generally require the bank levy to be paid on the normal due and payable dates for the applicable accounting periods of the responsible member determined by HMRC under paragraph 54(7) of Schedule 19 (BKLM444000). In these cases, the responsible member will, for example, return the bank levy in accounting periods that do not start and end on the same date as the chargeable period and will pay the bank levy on the instalment dates that relate to each applicable accounting period (BKLM461000).

To prevent groups benefiting from artificially creating a position where there is no chargeable member with an accounting period that is the same as the chargeable period of the relevant group - thereby obtaining a tax advantage by delaying the due date for payment of the bank levy, The Corporation Tax (Instalment Payment) (Amendment) Regulations 2011 include at Regulation 5B an anti-avoidance rule.

This rule only applies where:

  • any chargeable member or members that could otherwise have been the responsible member for the chargeable period under paragraph 54(3) or (5) make amendments to their accounting periods such that there is then no chargeable member that meets the requirements of paragraph 54(3) or (5) for that chargeable period, and
  • the main purpose or one of the main purposes of changing their accounting periods was to obtain a tax advantage.

In such cases the tax advantage arises where the effect of the changes would be to defer payment of the bank levy until after it would otherwise have been due had the changes undertaken not been made.

Where the anti-avoidance provision applies, the payments of the bank levy by the responsible member will be due in each applicable accounting period as if it started and ended on the same date as the chargeable period. This will apply for both the accounting period in which the change is made and going forward, to any subsequent accounting period that is affected by the changes.

Where the responsible company has paid the bank levy due for accounting periods to which this rule applies on dates that differ from the instalment dates that would arise had the accounting period started and ended on the same date as the chargeable period, then the normal rules regarding interest will apply.