CTSA: introduction: features from CTPF
There are also some important differences between CTSA and ITSA, all of which areinherited from CTPF:
- Under CTSA, companies continue to be chargeable to CT rather than IT.
- CT continues to be charged in a single amount on the sum of ‘profits’. This means income, computed under the same principles that apply to IT, and chargeable gains, computed under the principles that apply for CGT.
- Tax under CTSA continues to be charged for accounting periods. The length of an accounting period can vary with circumstances, and the company controls the end date, though no accounting period can exceed twelve months. By contrast, IT is always charged for the tax year ending 5 April.
- CT rates and limits are imposed for financial years, which begin on 1 April and end on 31 March following. (For example, the financial year 1998 is the year from 1 April 1998 to 31 March 1999.) By contrast, IT is charged for each tax year beginning on 6 April.
- Companies cannot opt for Revenue calculation of their tax, whereas individuals can do so.
- There continues to be a single, fixed due date for payment of CT. This is nine months and one day after the end of the accounting period (subject to the quarterly instalment payment regime for large companies).
- There are no surcharges for tax paid late. The CTPF pattern of late payment interest on tax paid late and repayment interest on overpayments of tax is retained.
- The notice to deliver a return continues to require the submission of accounts and computations as well as the return form.
- The penalty regime for late returns is virtually unchanged from CTPF. The regime is rather different from that applying to IT cases. In particular, under CTSA an automatic tax-related penalty can be based upon a Revenue determination of the tax charge.
- Carry-back reliefs will continue to reduce the tax liability for the relevant earlier years, with interest consequences that may be tied to the due date for the later accounting period. However, the abolition of ACT from 6 April 1999 and the general restriction of trade loss carry-backs to one year will make carry-backs less common in CTSA than in CTPF.