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HMRC internal manual

Compliance Handbook

Penalties for Inaccuracies: Calculating the penalty: Potential lost revenue Corporation Tax Group Relief or S458 CTA10: Potential lost revenue

This guidance applies to returns and documents with a filing date on or after 1 April 2009 where the return covers a tax period beginning on or after 1 April 2008. See CH81011 for full details.

When calculating potential lost revenue (PLR), ignore the following reliefs.

  • Group Relief (but see also CH82340 where the inaccuracy results in overstatement of group losses).
  • Relief deferred under Section 458(4) & (5) CTA10 (relief in case of repayment or release of loan).

Note: Additional relief under Section 458 (1) to (3) that can be deducted from the additional S455 charge in the inaccurate return reduces the PLR on which a penalty may be due, but relief that is deferred to another accounting period under Section 458(4) & (5) does not reduce the PLR.

Exceptions to this are

  • a penalty may still be charged on an inaccurate claim to relief
  • Group Relief claims where the inaccuracy has the effect of creating or increasing an aggregate loss recorded for a group of companies, see CH82340.

For an example of

  • Group Relief ignored, see CH82283 
  • Group Relief not ignored (the inaccurate claim exception), see CH82284 
  • Relief under Section 458(4) & (5) CTA10 ignored, see CH82285 
  • Relief under Section 458(4) & (5) CTA10 not ignored (the inaccurate claim exception), see CH82286.