HMRC internal manual

Corporate Finance Manual

CFM91730 - Debt cap: statement of allocation: revised statement and CTSA returns

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This guidance applies to worldwide group periods of account ending before or straddling 1 April 2017.

When a revised statement is submitted

As the time limit for revised statements is 36 months after the end of the relevant accounting period, it is possible that a relevant group company or UK group company will make a revised statement of allocation after it has submitted its CTSA return. If the statement of allocation has no effect on the profits chargeable to corporation tax of the company concerned, then the submission of the statement after the CTSA return has no effect on the company’s CTSA position. If however the statement of allocation either:

  • changes the amount of profits chargeable to corporation tax on the company; or
  • shows that any other information contained in the return is incorrect,

then the submission of the revised statement of allocation means that the company is treated as having amended its company tax return for the accounting period in which the profits are changed or the information is corrected (TIOPA10/S282 and S294).

In practice, a statement of allocation made for a new period of the worldwide group may also affect the profits chargeable by particular UK companies. Such a statement should also be treated as amending the CTSA returns of the relevant company or companies.

HMRC staff should ensure that, where a statement of allocation, or a revised statement, amends the self-assessments of one or more companies for one or more accounting periods, all of the necessary amendments are made on the COTAX system. Where companies in a worldwide group are dealt with at more than one office, it is the responsibility of the office receiving the allocation statement to ensure that other offices are notified.


A worldwide group has a period of account ending on 30 September. Q Ltd, a relevant group company within this group, prepares accounts to 31 December. In year ended 31 December 2013, Q Ltd has financing expense amounts of £3 million, of which £2.5 million relate to the period 1 January to 30 September 2013, and the remaining £0.5 million to the final three months of the accounting period.

On 6 August 2014, the authorised company for the group submits a statement of allocated disallowances for period of account ended 30 September 2013, showing a disallowance of £2 million allocated to Q Ltd for this period. Q Ltd does not, however, have certain knowledge of what disallowance (if any) will be allocated to it for the period of account of the worldwide group ended on 30 September 2014. In its CTSA return for year ended 31 December 2013, submitted on 31 December 2014, it estimates that there will be an overall disallowance of £2.25 million, and therefore its computations show £0.75 million of the financing expense as allowable, flagging this up as an estimated figure.

The authorised company submits a statement of allocated disallowances for year ended 30 September 2014 on 21 September 2015. This statement must show, in relation to Q Ltd, that the company has submitted a return for year ended 31 December 2013, and must disclose if that return is now incorrect (regulation 11 of SI 2009/3173). If there is no change in Q Ltd’s CT position, no further action is necessary. If, however, the statement of allocated disallowances shows that, say, only £0.1 million further disallowance is allocated to Q Ltd, then Q Ltd’s self-assessment should be regarded as amended accordingly, without that company needing to do anything further.