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HMRC internal manual

Company Taxation Manual

Corporation Tax self-assessment (CTSA): capital allowances: time limit - HMRC may extend

FA98/SCH18/PARA82 (2)

You should not normally admit claims to capital allowances made outside the normal time limit.

FA98/SCH18/PARA82 (2) gives a discretionary power to HMRC to extend the time limit for making, amending and withdrawing capital allowances claims.  SP5/01 (see CTM97060 for the full text) sets out the HMRC approach to the exercise of this discretionary power.  A decision to accept a late claim may be made by a Grade 6 Technical, Compliance or Case Manager, on their own authority, following the approach set out in the Statement.  A Grade 6 who considers, on the basis of SP5/01, that refusal is appropriate should refer the matter to CTIS (CT&BIT) for review before formal refusal is made.

Paragraph 10 of SP5/01 indicates that, in general, the HMRC approach is to admit late claims (and withdrawals of claims) which could not be made within the statutory time limits for reasons beyond the company’s control.  The Statement gives examples of such reasons.  Those examples are intended to illustrate matters that are beyond a company’s control.  They are not intended to be an exhaustive list.  Paragraph 11 gives some examples of matters that HMRC would not regard as being beyond the company’s control.

Paragraph 12 of the Statement may apply even if the company cannot show that the reasons for the late claim were beyond its control.  The company must send, with its application for the late claim or withdrawal to be admitted, a full explanation of the factors it wishes to be taken into account.  If it has not done so, this must be requested as part of consideration of the late claim.  A late claim or withdrawal may be accepted if, taking account of all of the factors, it would clearly be unreasonable to refuse it.

Officers should take into account when making a decision on a late claim or withdrawal whether it forms part of a scheme or arrangement, the main purpose or one of the main purposes of which is the avoidance of tax or payment of tax.

All referrals for the consideration of HMRC discretion should be made to CT&BIT Technical Advice using the template found by clicking the Technical Help button in the left bar of this manual.