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HMRC internal manual

Company Taxation Manual

HM Revenue & Customs
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Groups & consortia: consortia - group income: recovery of ACT or IT

The parts of ICTA88/S247 relating to payments of dividends were repealed from 6 April 1999 onwards. The remainder of Section 247 was repealed by FA01 in relation to payments of interest or charges made after 11 May 2001.

Under ICTA88/S247 (6) you can make assessments, adjustments or set-offs to recover ACT or IT. Section 247 (6) applies where a company purports, by virtue of an election under ICTA88/S247, to:

  • pay any dividends without paying ACT, or pay charges on income or loan relationship interest without having to account for IT, and
  • ACT ought to have been paid, or
  • IT ought to have been deducted.

The assessments, adjustments or set-offs under ICTA88/S247 (6) ensure that the resulting liabilities to tax, including interest on unpaid tax, of the company paying and the company receiving the dividends or payments, are, so far as possible, the same as they would have been if the ACT had been duly paid or the IT had been duly deducted. Where any tax assessed under ICTA88/S247 (6) on the company paying the dividends or making the payment is not paid by that company within three months from the date on which that tax is payable, ICTA88/S247 (7) provides that tax is recoverable from the company receiving the dividends or payments.