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HMRC internal manual

Company Taxation Manual

From
HM Revenue & Customs
Updated
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ACT collection: calculations

ICTA88/S246 (6) covers:

  • the ACT payable and the tax credit on dividends and other qualifying distributions paid in the five day period to 5 April in the financial year for which the ACT rate changes,

and

  • ICTA88/SCH13 accounting etc, where an accounting period straddles 5 April in that financial year.

If the rate of ACT for any financial year differs from the rate last fixed you should check that the following rules are properly applied.

  • The ACT payable on a distribution made in the 5 days to 5 April is calculated using the rate applying in the previous financial year.
  • Apply ICTA88/S238 (1) (definition of ‘franked payments’), ICTA88/S231 (1) (tax credit) and Schedule 13 (collection of ACT) to that distribution as if the rate had not changed.
  • You may find that a distribution has been made on or before 5 April in an accounting period which extends beyond 5 April in that year and another distribution is made or franked investment income is received in that accounting period after 5 April. If so:
    • the company’s liability for ACT,
    • the amount of ACT, and
    • the amount of any surplus franked investment income,

for that accounting period are determined under ICTA88/S241 and ICTA88/SCH13 as if the part of the accounting period ending with and the part of it beginning after 5 April were separate accounting periods.