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HMRC internal manual

Banking Manual

Banking surcharge: surcharge allowance: information to be included on banking company’s tax return – excessive specification of available allowance


A banking company can choose how much of its allowance should be used as a surcharge allowance against its surcharge profits and, if it has CFC chargeable profits, how much should be taken into account in its calculation of any CFC charge for the period. This information must be included in the banking company’s tax return and the total must not exceed its available allowance.

If the total exceeds the available allowance the company must, so far as it may do, amend its company tax return to correct the position.  If the company does not, or cannot, amend its return, HMRC can raise an assessment to recover the additional tax due. 

If the reason why the total shown in the banking company’s tax return exceeds the allowance is that the amount of group surcharge allocated to the company has been altered, HMRC has 12 months from the date of the alteration to raise the assessment. This is without prejudice to HMRC’s power to make a discovery assessment.