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HMRC internal manual

Company Taxation Manual

ACT collection: date payable

ICTA88/SCH13/PARA3 (1)

ACT is normally payable by 14 days after the end of the return period. The ACT so dueis the ACT on franked payments that are money payments and on FID paid in that return period. It is due without an assessment being made.

Franked payments that are not money payments are dealt with in CTM22100 and payments of an uncertain nature are dealt with in CTM22110.

We frequently get arguments about payment of ACT where once it is paid it will be set against a mainstream CT liability which will then be repaid. We are asked to allow an informal arrangement whereby the ACT is treated as paid and the CT as repaid. The only payment made by the company would then be any interest due in respect of the late paymentof the ACT. These ‘arrangements’ are not to be allowed. The statute requires ACT to be accounted for before it can be utilised to reduce mainstream CT.

Essentially, when a company pays a dividend it is obliged to account for ACT after the end of the relevant period. The fact that the company may claim not to have the money to meet the liability is really no concern of the Revenue. The Revenue cannot be looked upon as a bank of convenience and is entitled to require payment of the ACT on the appropriate due date. If the company can afford to pay a dividend then it can (or should be able to)afford to account for the ACT at the same time.

Once companies become aware that they could defer payment of ACT until after the end of the accounting period, when a netting off arrangement might be reached, the collector would be faced with problems in trying to enforce in year payments of ACT.

It must therefore be made clear that the Revenue has a statutory right to demand full payment of ACT regardless of whether this subsequently gives rise to repayment of CT.