Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Company Taxation Manual

From
HM Revenue & Customs
Updated
, see all updates

ACT: set-off against CT on profits: maximum

ICTA88/S239 (2)

ACT was set-off against CT charged on all of a company’s profits (accounting periods beginning on or after 17 March 1987).

Example

Company A is liable to CT for the 12 months accounting period to 30 September 1988 as follows.

Trading income £200,000  
     
CG (gain less losses brought forward) £600,000  
  £800,000  
Less charges £10,000  
  £790,000  
CT at 35% £276,500  

During the accounting period (after 5 April 1988) the company paid dividends of £270,000 on which ACT of £90,000 was paid. Company A also had at 1 October 1987 surplus ACT brought forward of £150,000.

Maximum set-off of ACT:

27% of apportioned profits to 31 March 1988    
     
(6 / 12 of £790,000 = £395,000) £106,650  
25% of apportioned profits to 30 September 1988    
(6 / 12 of £790,000 = £395,000) £98,750  
The CT payable is: £205,400  
CT (as above) £276,500  
Less set-off of ACT £205,400  
  £71,100  

Company A has surplus ACT of £34,600 (£150,000 + £90,000 - £205,400).

The company can:

  • make a claim under ICTA88/S239 (3) (see CTM20170 - CTM20240), or
  • carry forward under ICTA88/S239 (4) (see CTM20250).