General: claims: Corporation Tax
Capital allowance claims (including amended claims and withdrawal of claims) must be made in a company’s return, or in an amended return, for the accounting period for which the claim is made (apart from the few exceptional cases - CA11120). The company may claim less than the full amount available. The amount claimed must be specified.
An amended claim should be made or the claim should be withdrawn by amending the return.
A capital allowance claim for an accounting period may be made, amended or withdrawn at any time up to 12 months after the filing date for the company tax return for the accounting period. This means that in most cases the time limit is 2 years after the end of the accounting period (FA98/SCH18/PARA82).
The time limit is extended if there is an enquiry into the return. Where there is an enquiry the time limit is:
- 30 days after the issue of a notice of completion of the enquiry;
- when HMRC amend the return following an enquiry 30 days after the notice of amendment is issued;
- when there is an appeal against the amended return 30 days after the date on which the appeal is finally determined.
Amending a return to make, amend or withdraw a capital allowance claim within the time limits given for claiming capital allowances does not extend the time limit for amending a return.
An enquiry into a previous amendment of a return making, amending or withdrawing a capital allowance claim does not extend the time limit for claiming capital allowances. An enquiry is restricted to such a previous amendment if:
- the scope of the enquiry is limited because the notice of enquiry is issued after the time that HMRC may commence an enquiry into the whole of the return, and
- the amendment giving rise to the enquiry consisted of the making, amending or withdrawing of a capital allowances claim.
HMRC may extend the time limits for making, amending or withdrawing a capital allowance claim.
You should not extend the time limit unless circumstances beyond the company’s control prevented it being able to make the claim within the normal time limits.
Do not accept these as circumstances beyond the company’s control:
- a change of mind.
- hindsight showing that a different combination of claims might be advantageous: for example, the group relief available may be lower than the company expected it to be when it claimed capital allowances. The company may then want to claim further capital allowances. But that is not a circumstance beyond the company’s control. It could have claimed sooner.
- oversight or error, whether on the part of the company or its advisers.
absence or indisposition of an officer or employee of the company unless:
- the absence or illness arose at a critical time, which delayed the making of the claim.
- in the case of absence, there was good reason why the person was unavailable at the critical time.
- there was no other person who could have made the claim on behalf of the company within the normal time limits.
A company may make a capital allowance claim ‘out of order’ - that is, for an accounting period when a return for a later accounting period has already been made. This capital allowance claim may reduce the capital allowances due for that later accounting period. For example, a claim for plant and machinery allowances will reduce the qualifying expenditure in a plant and machinery pool and so the capital allowances due for later periods. Where this happens the company has 30 days to make the necessary amendments to its return for that later period.
If the company does not amend that return within 30 days you may amend it to make it consistent with the capital allowances available. The company may appeal in writing against the amendment of the return. The appeal must be made within 30 days of the issue of the notice of amendment.
There is also guidance about capital allowance claims by companies at CTM98000 onwards.