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HMRC internal manual

Banking Manual

Banking surcharge: calculation of surcharge profits: CT surcharge - computing taxable total profits


A company will calculate its total profits under section 4(3) CTA10 and taxable total profits under S4(2).

Step 1 of the calculation brings in all income chargeable to tax after giving direct reliefs against those forms of income.  The income may include research & development expenditure credits. The reliefs given may include reliefs arising before 1 January 2016 or, if later, before the company became a banking company. These are non-banking or pre-2016 loss reliefs.

At step 2 the company will add to the result at step 1, any chargeable gains less any relief against those gains.   This sum will not include chargeable gains transferred out to other group companies under a section 171A election but will include chargeable gains transferred in from other group companies under a section 171A election (BKM403850).

If the company still has profits remaining after completing these 2 steps it may claim group relief under CTA10/S137.  Any relief claimed from a non-banking company is non-banking group relief.

The resulting figure from completing these two steps and deducting group relief gives the taxable total profits.