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HMRC internal manual

Company Taxation Manual

Corporation Tax: small profits relief: administrative

The tax law rewrite Act CTA10 (which applies to accounting periods ending on or after 1 April 2010) removes the requirement that a company should make a claim for what became small profits rate relief, formerly small companies’ relief and marginal small companies’ relief. The relief is given as part of the CT self assessment, and this includes a statement of the number (including nil) of companies associated with the claimant company in the relevant accounting period unless the company is an unincorporated association. The return form (CT600) makes provision for this.

The only practical consequences of the removal of formal claim requirement are

  • the absolute time limit for making a claim is replaced by a time limit that may vary according to the circumstances, for example, whether the return is issued or sent back late
  • error or mistake relief claims become possible under FA98/SCH18/PARA51 if too much tax is paid because of the omission of relief from the return.

Revenue determinations

The main rate of CT will be charged in Revenue determinations made under FA98/SCH18/PARA36 and PARA37, except at the officer’s discretion if the determination does not exceed £75,000. When exercising this discretion, consider whether any additional CT will be due. This will only be the case if there are three or more associated companies.