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HMRC internal manual

Company Taxation Manual

From
HM Revenue & Customs
Updated
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Close companies: extended meaning of distribution: IT and ACT

The amount of an excessive pension, etc, to be disallowed may not be agreed until after the payment has been made and IT has been deducted and accounted for to the Revenue. Where tax was deducted on payment of the disallowed part the net amount paid should be regarded as the amount of the distribution (and, for distributions made before 6 April 1999, ACT accounted for on that amount). If the company makes good the deductions to the participator, etc, the distribution (and, where appropriate, the ACT to be accounted for) will be correspondingly increased. Any necessary overpayment of IT on the amount disallowed paid to the Revenue should, where appropriate, be set off first against ACT payable, and any balance repaid.