COM100 - Glossary of terms
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
A
ACT
ACT stands for Advance Corporation Tax. It applied only to APs ending on or before 5 April 1999.
Where a company paid a dividend or other qualifying distribution, it had to make an advance payment of CT. The ACT was calculated by reference to the amount or value of the distribution made.
Full details about ACT are contained in the Company Taxation (CT) Manual at CTM20000 onwards.
Account
Companies and their agents refer to their view of CT View L and P as their account. They may also refer to it as the Business Tax Dashboard.
The service shows the information in COTAX Function VPPD (View Payment and Posting Details) in a way that an outside user can understand.
Accounting reference date
Newly incorporated companies have an Accounting Reference Date (ARD) on their record at Companies House.
The ARD is fixed by company law and is the date to which Companies House require accounts to be filed, subject to any successful application made by the company to change that date.
The ARD is the anniversary of the last day of the month in which the company was incorporated.
Administrative Limit
The administrative limit is the amount below which pursuit action is deemed not to be worthwhile. Amounts below the administrative limit are considered for remission by COTAX during the automatic pursuit cycle or in the office during local pursuit.
The action taken before remission depends on the amount collectible.
£32.01 to £100 collectible. The full series of payment applications are issued before the liability is considered for remission.
£32 or less collectible. No payment applications are issued. The liability is considered for remission immediately.
COTAX refers amounts below the administrative limit for local pursuit where any of the following conditions apply:
- the collectible amount is or includes a penalty
- the AP is LA-ENF
- another AP is LA or PLA.
Administrative receivership
An administrative receivership exists when an insolvency practitioner (IP) is appointed to control the whole or major part of a company’s assets or property for the benefit of a secured creditor.
Administration
A company administration order is an order of the Court directing an insolvency practitioner, called the administrator, to manage the affairs of a company.
For further information see INS3000 of the Insolvency Manual.
Agent
The term agent means an accountant, auditor, solicitor, group tax department, or any other person or firm who prepares returns or accounts for a company and advises or acts for it in tax matters.
The term does not include an administrator, liquidator or receiver or any other person or body who has a different relationship with the company from that of accountant or tax adviser.
Agent identity / Agent ID
The unique code COTAX gives to an agent. You enter the Agent ID on the company’s COTAX record instead of the agent’s name, address and phone number.
The code is in one of the following formats: 12345A or A1234A.
Annual balance date
The date at the end of the Collection account year. This is the period from the last Friday in October in one year to the Thursday before the last Friday in October of the following year inclusive.
AP status
The AP status is one of the following.
Live Working. The company is expected to deliver a return for this AP or a self assessment has been recorded but an amount remains outstanding.
Live Cleared. The company has delivered a return and a self assessment has been recorded or the No Determination Required (NDR) signal is set for this AP.
Superseded Working. This period is no longer regarded as an AP for the company but there is an amount collectible or an amount is held awaiting reallocation.
Note: The amount held is usually the penalty which has been charged for the period specified on the notice to deliver, not the AP
Superseded Cleared. This period is no longer regarded as an AP for the company and there are no amounts collectible.
Dormant. HMRC believe the company is not within the charge to CT for this period and no liability is expected to arise.
Exempt. The company is exempted from delivering a return for this period.
Note: The AP status ‘exempt’ is used only for charities, the non-taxable element of UK-REITs and Treaty Non-Resident Companies.
Suspense. An amount is held in a suspense account until HMRC staff identify the correct AP for allocation.
Apportionment Notice for a Group Payment Period
The Group Payment Team issues an HMRC Apportionment Notice for a Group Payment Period if the nominated company does not respond to a Closure Notice within 30 days of its issue.
It shows how HMRC intends to apportion payments made for the Group Payment Period (GPP) against the participating companies’ APs for the GPP if the nominated company fails to respond within 30 days of the issue of the notice.
Assessment
The term assessment for a CTSA AP refers to any event that creates or amends the tax charge. The term refers to a revenue determination, a self assessment, a correction notice to a return, a taxpayer amendment, giving effect to a claim, a closure notice with revenue amendment after enquiry, a revenue amendment, a discovery assessment or a jeopardy amendment.
Auto enforcement process
Where a new work item enters IDMS and there are no existing work items for the same taxpayer reference, the work item may be selected for the Auto Enforcement Process (AEP). Selection takes place either on creation of the work item or, where appropriate, when it leaves the Telephone Pursuit Unit.
When the selection has been made, IDMS automatically issues an appropriate enforcement warning letter and moves the item to that enforcement process.
Every letter is accompanied by a Statement of Liability and both are printed centrally. They are sent to the communication address if available or to the Registered Office.
Where the letter is successfully produced, an Action History is recorded in IDMS showing the date of issue, type of letter, address to which it was issued, the total amount due and the interest included in that total amount. To allow time for case preparation the work item appears on the appropriate Work List for review three days after the issue of the warning letter.
The rules for AEP are on IDMS Helpcard 16.
B
Bacs
Bacs is a service provided by Bacs Ltd to its member banks. It is responsible for the clearing and settlement of automated payments in the UK, including Direct Debit and Bacs Direct Credit. Automated payments avoid the need for handling cheques or cash payments.
Bank giro
Bank Giro is a credit transfer system that enables payments to be made through a bank branch direct to HMRC.
Bona vacantia
Bona vacantia is a Latin term that means ownerless goods. By law, anything considered to be bona vacantia goes to the Crown.
In particular, under company law, rights and property of a company which has been dissolved are bona vacantia. That includes the right to a tax refund from HMRC.
You can find further information about bona vacantia on the internet.
Business rules
Business rules are detailed published documents that represent the requirements of HMRC in respect of specific forms and procedures. An example is the rules and validations that software developers need to produce programmes to deliver CT online returns.
C
Calculation of tax payable
The amount of tax payable for an AP is calculated as follows:
Step 1
Calculate the CT chargeable by taking the amount of the company’s profits chargeable to CT for the period and applying the rate or rates of CT applicable to the company.
Step 2
Give effect to any reliefs or set-offs available against CT such as marginal relief and double taxation relief.
Step 3
Add any amount due under Section 455 CTA 2010 (previously S419 ICTA 1988) on loans or advances by a close company to a participator or chargeable under Section 747 ICTA 1988 on profits of controlled foreign companies.
Step 4
Deduct any amounts to be set off against the company’s overall tax liability, such as income tax borne by deduction.
Cancelled repayment inhibit
When a repayment is cancelled, COTAX reverses the postings and recreates the overpayment.
To stop any further automatic processing of the recreated overpayment, the cancelled repayment inhibition is set for all APs involved in the repayment when a payable order is cancelled using Function CNPO (Cancel Payable Order) or a Bacs repayment is cancelled by Finance, Worthing.
You must examine cancelled repayments and make any amendments needed to COTAX records before you consider dealing with the repayment using Function DIRR (Direct Repayment).
For example, there are occasions where, if the repayment and associated repayment interest is cancelled, COTAX does not recalculate the repayment interest correctly when repaying again. In these cases you need to calculate the repayment interest manually and reintroduce repayment interest as a District Set off (DSET), code no 50881. See COM125094 and COM122010 for further guidance.
The ‘cancelled repayment inhibition’ is unset automatically if the charge is increased, making the AP underpaid or the AP becomes balanced or manually using function MAPS (Maintain AP Signals) in the responsible office.
We recommend that you do not unset the cancelled repayment inhibition, but instead make any remaining repayments using function DIRR (Direct Repayment) when you are in a position to go ahead with the repayment. Manually unsetting the signal could prompt the incorrect reissue of the cancelled repayment.
Capacity
A capacity exists where a person or body is appointed to act for a company.
The capacities used on COTAX are administrator, agent of a non resident company, liquidator, receiver or trustee.
Caseflow
Caseflow is an HMRC electronic case management system that is intended to help to manage the full lifecycle of compliance checks, from the simplest educational work to the management of the most complex relationships with businesses.
Certificate of Tax Deposit
The Certificates of Tax Deposit (CTD) scheme enables a company to make payments which the Government holds as deposits against future tax liabilities. Only CTDs purchased before 1 October 1993 can be used in settlement of COTAX liabilities.
CHAPS
The Clearing House Automated Payment System (CHAPS) is a facility offered by banks for guaranteeing same day payment between accounts and is normally used for paying large amounts.
Charge
COTAX deals with the following posting types as a charge.
Self assessment.
Revenue determination or CTPF assessment.
Section 455 CTA 2010 charge.
Section 747 ICTA 1988 charge.
Postponement and release orders.
Suspensions.
Clerical interest indicator
The clerical interest indicator (CII) signal is set to instruct COTAX not to calculate and charge late payment interest automatically. Setting the CII signal to 'Y' also inhibits automatic repayment, reallocation and the issue of payment applications.
The CII signal may be set on an AP where the Pursuit Status is RFI, LA or LA-ENF as follows.
By the operator using Function RAPP (Revise AP Pursuit) or Function MAPS (Maintain AP Signals).
By COTAX where any one of the following apply: a clerical interest charge is raised using function RMIC (Raise Manual Interest Charge), an ACT or loss carry-back claim results in repayment and / or reallocation or relief is given under Section 458 CTA 2010 where a loan, or part of it, has been repaid.
Where the CII signal is set the ‘Total Interest Accrued to Date’ shown in Function VPPD (View Payment and Posting Details) on screen COT215C is either the amount charged or Nil.
Clerical pursuit
Clerical pursuit is the action taken in either Banking Operations or Debt Management Office to collect an outstanding amount.
Where the pursuit status is one of the following, the AP is subject to clerical pursuit.
LA (local action).
LA-ENF (local action - enforcement proceedings).
PLA (permanent local action).
RFI (refer for instruction).
PRFI (permanent referred for instruction).
Closure notice with revenue amendment
A caseworker issues a closure notice at the end of an enquiry into a company tax return. The closure notice brings the enquiry to a formal end and includes a revenue amendment.
The notice advises that enquiries are now completed, states the caseworker’s conclusions and where appropriate, amends the return to give effect to the conclusions stated in the closure notice.
The statement of conclusions should always contain sufficient detail to enable the company to understand all amendments being made to its returns, including any that are required for other periods. For further guidance, see the Enquiry Manual at EM3833.
Closure notice for a Group Payment Period
A closure notice for a Group Payment Period is issued to the nominated company once a tax charge has been established, including revenue determinations if appropriate, on each of the participating companies’ APs.
The closure notice details the charges held for each participating company, details all the payments made in respect of the Group Payment Period at the date of issue, together with their EDPs and identifies any apparent underpayment or overpayment.
The notice asks the nominated company to tell HMRC within 30 days of the closure notice how payments should be allocated against the charges and how we should dispose of any over or underpayment.
Common period
If a potential CT repayment is to be allocated against CT arrears (not interest or penalties) and there is a common period during which repayable tax is attracting repayment interest and a CT arrear is attracting late payment interest then, for that common period, on the amount reallocated, COTAX neither credits the company with repayment interest nor charges it late payment interest.
Common period rule
Regulations made under S178 FA 1989 prescribe the rates of both late payment interest (LPI) and repayment interest (RPI). The rate of RPI is less than the interest rate on payments of overdue tax.
The rate for RPI is less than that for LPI because the rate for charging a company interest is set in line with the average market cost of borrowing. It is calculated net of CT at the small profits rate. The rate for paying interest to a company is set in line with the average market return on deposits net of CT at the main CT rate.
Common periods: repayment and late payment interest
COTAX normally calculates any RPI due automatically and includes it in any reallocation or repayment made, whether manually or automatically. It calculates RPI to the day the repayment is issued, not to the day the repayment is created or authorised.
COTAX deals with the common period rule which is if a potential repayment of CT is to be re-allocated against CT arrears (not interest or penalties) and there is a common period during which repayable tax is attracting RPI and the CT arrear is attracting LPI, then for that common period, on the amount re-allocated, COTAX neither credits the company with RPI nor charges it LPI.
To calculate any RPI due and determine the effective date of payment to apply to the reallocation posting, COTAX compares the normal due date of the overpaid AP with the normal due date of the receiving AP and using the common period rule and calculates the extent to which RPI is payable and determines the EDP of the reallocation.
Communication address
A communication address is held when a company has an address other than the Registered Office to which applications for payment are issued, requests that applications for payment be addressed in a name other than the company name, for example a trade name or can be contacted by phone at the address to which applications for payment are sent.
Company
A company can be a corporate body, showing `Ltd' or `PLC' as part of its title or an unincorporated association.
Unincorporated associations include members' clubs, trade associations and authorised unit trusts.
They do not include partnerships, local authorities or local authority associations.
Company is part of a group that is not small
For APs ending after 31 March 2008, a company has to identify itself to HMRC if it is ‘part of a group that is not small’, as defined in S383(2) and S474(1) of the Companies Act 2006.
Normally it will do so by completing the relevant field on their return.
Companies need to give us this information because it determines the last date for enquiry into a return.
See the entry for ‘Enquiry window’ in this glossary.
Company liquidation
A company may be wound up, that is liquidated, as follows.
Voluntary, because the members voluntarily decide there is no further use for the company or the company directors pass a resolution calling for a creditors’ voluntary winding up because the company finds itself unable to carry on business. The company’s affairs are then dealt with by a liquidator.
Compulsory, because the company has been wound up by order of the Court as it is unable to pay its debts. The company’s affairs are then dealt with by an official receiver, except in Scotland or Northern Ireland, or liquidator.
Company Registration Number formats
English and Welsh companies have registration numbers of eight digits. Companies registered in Scotland and Northern Ireland and those registered by the Financial Services Authority have a one or two character alphabetic prefix. The following are all possible values for the prefix.
AC. Assurance Company England and Wales.
FC. Foreign Company England and Wales.
GE. European Economic Interest Grouping (EEIG) England and Wales.
GN. EEIG Northern Ireland.
GS. EEIG Scotland.
IC. Investment Company with Variable Capital (ICVC) England and Wales.
IP. Industrial and Provident England and Wales.
LP. Limited Partnership England and Wales. Companies registered under this prefix are not liable to Corporation Tax and must not be set up on COTAX.
NA. Assurance Company Northern Ireland.
NF. Foreign Company Northern Ireland.
NI. Northern Ireland Company.
NL. Limited Partnership Northern Ireland. Companies registered under this prefix are not liable to Corporation Tax and must not be set up on COTAX.
NO. Other Northern Ireland.
NP. Industrial and Provident Northern Ireland.
NR. Royal Charter Northern Ireland.
NZ. Not Companies Act Northern Ireland.
OC. Other England and Wales. This prefix is only used for LLP cases in liquidation.
R. Northern Ireland Company registered before the partition of Ireland in 1922.
RC. Royal Charter England and Wales.
RS. Registered Society.
SA. Assurance Company Scotland.
SC. Scottish Company.
SE. Societas Europaea.
SF. Foreign Company Scotland.
SI. Investment Company with Variable Capital (ICVC) Scotland.
SL. Limited Partnership Scotland. Companies registered under this prefix are not liable to Corporation Tax and must not be set up on COTAX.
SO. Other Scotland. This prefix must only be used for Scottish LLP cases in liquidation.
SP. Industrial and Provident Scotland.
SR. Royal Charter Scotland.
SZ. Not Companies Act Scotland.
ZC. Not Companies Act England and Wales.
Company Voluntary Arrangement (VA)
A VA enables a debtor to come to a formal agreement with creditors regarding payment of debts. Proposals are prepared by an insolvency practitioner.
The proposals are placed before a creditors’ meeting and if approved, with or without modifications, are binding on all creditors who were notified of the proposals. Once approved, the VA is implemented by an insolvency practitioner called the supervisor.
Corporation Tax Group Payment Arrangement Apportionment Notice
The Group Payment Team issues an HMRC Apportionment Notice for a Group Payment Period if the nominated company does not respond to a Closure Notice within 30 days of its issue.
It shows how HMRC intends to apportion payments made for the Group Payment Period (GPP) against the participating companies’ APs for the GPP if the nominated company fails to respond within 30 days of the issue of the notice.
Corporation Tax Group Payment Arrangement Closure Notice
A closure notice for a Group Payment Period is issued to the nominated company once a tax charge has been established, including revenue determinations if appropriate, on each of the participating companies’ APs.
The closure notice details the charges held for each participating company, details all the payments made in respect of the Group Payment Period at the date of issue, together with their EDPs and shows any apparent underpayment or overpayment.
The notice asks the nominated company to tell HMRC within 30 days of the closure notice how payments should be allocated against the charges and how we should dispose of any over or underpayment.
Correction notice
This is the notification that you have corrected an obvious error or omission from a company’s return. It must be issued within nine months of the date of the receipt of the return.
CQI
CQI was a management tool used in most HMRC offices carrying out CTSA enquiries prior to the introduction of Caseflow.
Some offices, such as Large Business Service and Special Civil Investigations, did not use CQI as they have their own systems for recording and monitoring enquiry work.
Credit / debit interest indicator (CDII)
The credit / debit interest indicator (CDII) signal is set on quarterly instalment payment cases to instruct COTAX not to calculate and charge credit or debit interest automatically.
Setting the CDII signal to ‘Y’ makes the AP RFI or LA and also inhibits automatic repayment and reallocation.
The CDII signal may be set on an AP where the pursuit status is RFI, LA or LA-ENFby the operator using Function RAPP (Revise AP Pursuit) or Function MAPS (Maintain AP Signals).
Credit interest
Credit interest arises under the quarterly instalment payment provisions. It can arise to any company, not just an instalment payer.
It can run at any time during the ‘instalment period’ which is from the due date for the first quarterly instalment payment, or what would be that due date if the company were liable to make such payments to the normal due date.
For an instalment payer, it runs for every day on which the amount of tax paid by the company exceeds the amount it was required to pay under the quarterly instalment payment rules.
For all other companies, credit interest is payable on any tax paid before the normal due date.
Notes.
Credit interest, like all other interest companies are entitled to under the CTSA provisions, is taxable and must be included in company tax returns.
Overpayments of tax after the normal due date usually attract repayment interest. If the payment which led to the overpayment was made before the normal due date it attracts credit interest.
Credit interest runs at a slightly higher rate than repayment interest.
Credit interest is not calculated or posted on the company’s COTAX record until a self assessment has been recorded or a revenue determination has been made and the normal due date has been reached.
CTSA assessment types
The term assessment for a CTSA AP refers to any event that creates or amends the tax charge. The term refers to the following types.
Revenue determination.
Correction.
Self assessment.
Taxpayer amendment.
Closure notice with revenue amendment.
Revenue amendment.
Jeopardy amendment.
Discovery assessment.
An appeal can only be made against a revenue or jeopardy amendment, or a discovery assessment.
CT regimes
Corporation Tax Assessing (CTA) relates to any AP ending before 1 October 1993.
CT Pay and File (CTPF) relates to any AP ending on or after 1 October 1993 and before 1 July 1999.
CTSA (Corporation Tax Self Assessment) relates to APs ending on or after 1 July 1999.
D
Debit interest
Debit interest arises under the quarterly instalment payment provisions. It can only arise on an instalment payer.
It can run at any time during the ‘instalment period’ which is from the due date for the first instalment payment to the normal due date.
It runs for every day during the instalment period on which the amount of tax paid by the company is less than the amount it was required to pay under the quarterly instalment payment rules.
Notes.
Debit interest is deductible in computing profits for CT purposes.
Payments of tax made after the normal due date do not attract debit interest. They usually attract late payment interest.
Debit interest is not calculated or posted on the company’s COTAX record until self assessment has been recorded or a revenue determination has been made and the normal due date has been reached.
Decision maker
The decision maker is the HMRC officer who is responsible for a decision or assessment that a customer appeals against. Where the appeal is against a fixed penalty or any other item issued automatically by COTAX, the person who initially considers the dispute is treated as the decision maker.
For more information, see the Appeals, Reviews and Tribunals Guidance (ARTG) Manual.
Deferred filing date
A caseworker can defer the filing date if the company or agent apply for further time to file the return and the Technical Caseworker accepts that the reason for the delay is acceptable or the Registrar of Companies has allowed the company extra time to file its statutory accounts.
The company can file its return after the normal filing date but before the deferred filing date without incurring a penalty.
Discovery assessment
A caseworker can make a discovery assessment when there are profits which ought to have been assessed but have not been assessed or an assessment, including a self assessment, is or has become insufficient or any relief that has been given is, or has become excessive and it is not possible to open an enquiry into the return.
District record of rejections
The district record of rejections is an establishment file called ‘Returned form CT600’.
Clerical staff maintain the file and record the return of an unsatisfactory form CT600 to the company or agent.
The file records the date the return was submitted, the date the return was sent back and the reason why the return was unsatisfactory.
DMB office identifying number
The recovery office identifying number consists of six digits - ‘3’ followed by a three digit office identifier and two final zeros, for example 364500.
You can see the Debt Management office owning the case using Function VTPR (View Taxpayer) ‘View Office Details’ screen TXP018C.
Dormant
A company is dormant when it does not receive any profits or income and holds no chargeable assets.
As a relaxation to this rule, HMRC treats a company that merely exists to hold chargeable assets as dormant providing the company is unlikely to make any disposals in the near future.
E
EDP
The effective date of payment (EDP) is the date given to a payment type posting and which is used to determine late payment interest.
EDP for ACT and loss carry-backs - The effective date of payment (EDP) for ACT and loss carry-back postings is the normal due date of the originating AP, except where a trading loss is carried back to an AP falling wholly within the preceding 12 months, when the EDP is the normal due date of the receiving AP.
In certain circumstances the EDP is incorrect. For more information see COM50000 onwards.
EDP for payments - The effective date of payment (EDP) for different types of payment is as follows.
Cheque - the date of receipt of the payment by HMRC plus two business days.
Postal order or cash - the date of receipt of the payment by HMRC or, if the payment was received following a day when the office was closed, the date the office was first closed.
Post dated cheque - the date the cheque is processed plus two business days.
Bacs, CHAPS, Paymaster - one working day before value is received by HMRC.
Bank giro and other credits received direct - three working days prior to the date of processing by HMRC.
Direct debit - the day before the collection day. Collection days are the 5th, 12th, 19th and 26th of each month, or on the next working day.
EDP for ACT and loss carry-backs
The effective date of payment (EDP) for ACT and loss carry-back postings is the normal due date of the originating AP, except where a trading loss is carried back to an AP falling wholly within the preceding 12 months, when the EDP is the normal due date of the receiving AP.
In certain circumstances the EDP is incorrect. For more information see COM50000 onwards.
E-filed return
We use this term for a return submitted electronically through CT online services.
COTAX automatically logs and captures the return and records the self assessment unless prevented by various conditions.
Enforcement and Insolvency Service
The Enforcement and Insolvency Service is made up of three elements:
Enforcement Office (Belfast)
Enforcement and Insolvency Service (Worthing) which includes Debt Management and Compliance Services. Included under this umbrella are both the Voluntary Arrangement and Insolvency Service
Enforcement Office (Scotland) which also includes the Civil Recovery Section.
Enforcement in the Magistrates' Court
Under paragraph 30 of schedule 19 FA 1998 you can take enforcement in the Magistrates’ Court for CT which does not exceed £2,000. In practice you must be satisfied that any Magistrates' Order can be enforced by distress warrant. For more information see the Recovery Manual REC1207.
Para 65(1) TMA 1970 gave the original and general authority for proceedings in the Magistrates' Court. With the introduction of ITSA, section 19 of schedule 19 FA 1994 specified the types of tax and inadvertently excluded CT.
The authority of para 30 Sch 19 FA 1998 now reinstates the original intention that Magistrates' Court can be used for recovery of CT.
Enquiry in progress signal
COTAX displays this signal to show that an enquiry is taking place into one of the CTSA returns on the record. It inhibits the use of certain functions.
In those offices using Caseflow or CQI to control enquiry cases, the enquiry in progress signal is automatically entered and amended from Caseflow or CQI.
If your office does not use Caseflow or CQI, you must use Function MAPS (Maintain AP Signals) to enter or amend the signal.
When the signal is set to ‘Y’, COTAX allows you to make a jeopardy amendment to the return for the AP on which the signal is set or prepare a closure notice with revenue amendment to complete the enquiry into the return for the AP, but does not allow the unlogging of the return for the AP under enquiry, automatic repayments or reallocations from the AP under enquiry, automatic repayments from any AP or a taxpayer amendment to the return for the AP under enquiry.
When a closure notice with revenue amendment is recorded to finalise the enquiry, COTAX automatically enters the enquiry end date equal to the date of issue of the closure notice with revenue amendment and sets the enquiry in progress signal to ‘N’.
Notes.
COTAX does not change any of the repayment inhibitions until 14 days after you have issued the closure notice with revenue amendment.
Do not use Function MAPS to enter the enquiry ended date and change the enquiry in progress signal to ‘N’ if you have used Function RAMA (Record / Amend Assessment) to issue the closure notice with revenue amendment.
There is no automatic update of enquiry closure details between COTAX and Caseflow or CQI. Once the enquiry is settled in COTAX, you must settle the case in the other system.
Enquiry window
The written notice of an enquiry into a company tax return must be given within a specified period of time following the delivery of the return.
The time limit for issue of a notice to enquire into an original return is as follows.
A return that is delivered on or before the filing date and the company is a member of a group that is not ‘small’ - 12 months from the statutory filing date. Note: The definition of a group that is ‘small’ is in S383 Part 15, Chapter 1 Companies Act 2006.
A return that is delivered on or before the filing date for other companies - 12 months from the date of receipt of the return.
A return that is delivered after the filing date for all companies - the period ending on the 31 January, 30 April, 31 July or 31 October next following the first anniversary of the day on which the return was delivered.
The time limit for issue of a notice to enquire into an amendment to a return for all companies is the period ending on the 31 January, 30 April, 31 July or 31 October next following the first anniversary of the day on which the amendment was made.
Enterprise Act 2002
The Enterprise Act 2002 includes provisions to reduce the impact of bankruptcy on the family home, increase the use of administration instead of administrative receivership, get more money to ordinary trade creditors in insolvency proceedings, lessen the stigma of insolvency and ensure non-culpable bankrupts can move on quickly.
Further information on the Enterprise Act 2002 is available in the Insolvency Manual.
F
Fastpath
A CT Pay and File assessment based on figures captured from a return that COTAX issues automatically when a return is screened ‘A’ using Function SRTN (Screen Return).
Filing only agent
Filing only agents are set up on COTAX and have an agent identity. They can submit an electronic return for any company even if they do not have 64-8 authority for that company.
Note: You cannot enter into any correspondence or communication with a filing only agent as we do not have authority to do so.
Flat rate penalties
A company becomes liable to flat rate penalties if it is required to deliver a company tax return and fails to do so by the filing date.
The penalty is £100 if the return is delivered within 3 months after the filing date or £200 in any other case.
These amounts are increased to £500 and £1000 for a third successive failure, if the company is continuously within the charge to CT for 3 consecutive APs, is required to deliver a return for each AP, was liable to such penalties for the first and second APs and is again liable to penalties for the third AP.
These penalties are defined in FA1998 as flat rate penalties for CTSA APs. They had no statutory name in TMA 1970, but were colloquially known as fixed rate penalties for CT Pay and File APs.
COTAX does not produce separate penalty output for CTSA and CT Pay and File APs, so all penalty output refers to flat rate penalties. The term has either its statutory or plain English meaning depending on the legal context.
G
Government Gateway
The centralised registration service for all Government digital services in the UK.
Group payment arrangement indicator
Each company record has a signal to indicate whether or not it is in a group payment arrangement (GPA). You can see the signal in Function DAPD (Display AP Details) and it has one of the following values.
G (group). The COTAX record has been set up as a Group Payment Arrangement Record (GPR).
P (participating company). The company is participating in a GPA.
N (neither). The company is not involved in a GPA.
Group payment period
The group payment period (GPP) is a period of account of the nominated company to which a group payment arrangement (GPA) applies.
The period cannot exceed 12 months and is normally the AP of each participating company.
The GPA automatically applies to successive GPPs until terminated by either HMRC or the group.
Group payment record
The group payment record (GPR) is created by the group payment team at Banking Operations, for each Group Payment Arrangement (GPA).
All payments made by the group are allocated to the GPR until all the participating companies have a tax charge.
Group payment team
There is a group payment team in Glasgow which is responsible for making the group payment arrangement (GPA) contract and running the GPA.
The address of the group payment team is:
Group Payment Team
1 Atlantic Square
21 York Street
Glasgow
G2 8HS
Group principal company
The company whose caseworker co-ordinates a special arrangement for group relief claims.
H
HMRC portal
The HMRC portal lies within the Government Gateway and allows companies to access CT online services.
It authenticates users, and ensures the appropriate level of privacy.
It is also capable of a degree of personalisation, so that companies can use the portal to match their own circumstances and requirements.
I
IDMS
IDMS stands for the Integrated Debt Management System. It includes the automated computer support for recovery and enforcement processes.
Immediate action work lists
These are the work lists that require immediate action, such as all lists relating to repayments or reallocations.
Function DIAW (Display Immediate Action Work Lists) displays the number of cases held on the immediate action work lists.
Local management must ensure that DIAW is reviewed at least once a day so any new cases are dealt with without delay.
Incorporation
The formation of a company, in accordance with the Companies Acts or other legislation.
Inhibit penalty indicator
The inhibit penalty indicator is set to stop COTAX charging any further penalties for an AP.
Examples of the reasons for which it is set are:
Where there is an unallocated return. The company has delivered a return for a period that does not match any live AP held on the COTAX record and COTAX has been unable to process it automatically.
A deferred filing date.
A superseding AP that supersedes an AP that has a penalty charge.
Instalment due date
An instalment due date is a date on which a quarterly instalment payment is due and the dates are shown below.
For a 12 month AP -
First. 6 months and 13 days from the start of the AP
Second. 3 months from the first instalment due date
Third. 3 months from the second instalment due date.
Final. 3 months and 14 days from the end of the AP.
For an AP of less than 12 months
the final instalment is due, as normal, 3 months and 14 days from the end of the AP
earlier instalments are due only if the dates for the earlier instalments (as shown above) fall earlier than the date of the final instalment.
This means that an AP of three months or less, requires only the final instalment; between three months and one day and six months, requires only a first and a final instalment; between six months and one day and nine months, requires a first, second and final instalment; more than nine months, requires all four instalments.
For more information see COM95000 onwards.
Interest Review Unit
The Interest Review Unit is part of Banking Operations based at Cumbernauld.
The unit is a specialist section that has authority delegated by the HMRC Executive Committee to make decisions on exercising discretion over payment of interest and handles all interest objection submissions from all offices.
Where the unit considers that some of the interest should be given up, they remit it, normally under Class 10.
Note: Class 10 remissions cannot be authorised locally.
You make a submission to the Interest Review Unit using the online form Interest Objection Submission.
Internal portal
The service that allows HMRC staff access to CT View L and P, an internal copy of the external Business Tax Dashboard and View CT Returns, an internal view of return information submitted using CT Online Services.
IRIS
IRIS stands for Inland Revenue Information Service. A separate IRIS system is maintained for each Banking Operations office.
IRIS enables operators to view Banking Operations taxpayer indexes and overpayment records.
IVT INP201
On IRIS, input via terminal input code 201 is the function that allocates to OAS company tax payments that have been received and banked locally in a Debt Management Office.
When the case appears on the Daily Statement, Banking Operations use Function REAI (Direct Reallocation Into COTAX) to reallocate the payment from OAS to the company record.
When using this function it is important that the correct effective date of payment (EDP) is entered for each payment.
The function is also used to create a minus entry in OAS where a payment is returned by the bank as ‘uncleared’. A corresponding plus OAS entry is created by removing the payment from the COTAX record using Function REAO (Direct Reallocation Out Of COTAX). The plus and minus entries in OAS are then cross referenced.
iXBRL
Most company accounts and computations must be submitted through CT Online Services in iXBRL (Inline Extensible Business Reporting Language) format. iXBRL is an industry-accepted standard, which provides an electronic identifier for each item contained in the accounts
J
Jeopardy amendment
We use the term jeopardy amendment for an HMRC amendment to the self assessment during an enquiry to prevent a loss of tax. Such an amendment is issued where the caseworker believes the return understates the company’s true liability and there is imminent danger of a loss of tax.
The company may, within 30 days following the date of issue of the amendment, submit an appeal against the amendment. It is held until completion of the enquiry. It may ask to postpone payment of the additional tax charged, pending settlement of the appeal.
Full details are in the Enquiry Manual.
Joint amended return (JAR)
An amended return made under the special arrangements that exist for group relief claims.
K
There are no items listed for K.
L
LA
The local action (LA) signal is set when the AP is referred to the owning Debt Management Office for further action.
The signal may be set for an AP by COTAX following the full sequence of payment applications or by the operator using function RAPP (Revise AP Pursuit).
LA-ENF
The local action - enforcement proceedings (LA-ENF) signal is set by the operator in a Debt Management Office when enforcement action has been commenced for the AP.
The LA-ENF signal can be set using function RAPP (Revise AP Pursuit) providing the LA signal has already been set.
Late payment interest
When payment of tax is made after the normal due date for APs ending after 30 September 1993, interest is charged under Section 87A TMA 1970 from the normal due date to the effective date of payment (EDP).
Lower limit
Where profits for a company do not exceed this amount, CT is charged at the small profits rate. See Part 3, Section 18 Corporation Tax Act 2010.
M
Marginal relief
Relief that a company can claim where their profits fall between the lower limit and the upper limit. See Part 3, Section 19 Corporation Tax Act 2010.
Material dates - CT Pay and File
For CT Pay and File APs, the material date is the later of the due date, which is the date in list A below (No carry-backs) or list B below (Carry-backs) or the date the tax being repaid was paid.
List A (No carry-backs):
CT - the due date.
IT - the due date.
SC60 - the due date.
S242 - the due date.
Claims under S242 ICTA 1988 were abolished for APs beginning on or after 2 July1997.
Foreign Income Deduction - the due date. There is no entitlement to repayment before the material date is reached.
List B (Carry-backs):
CT, IT, S242 tax credits or CIS25 tax overpaid because of a carry-back of trade losses to a period wholly within the preceding 12 months - the due date of the AP for which the tax was overpaid (S826(2) ICTA 1988.)
CT, IT, S242 tax credits or CIS25 tax overpaid because of a carry-back of trade losses to a period not wholly within the preceding 12 months - the due date of AP in which the losses arise (S826(7A) ICTA 1988).
CT, IT, S242 tax credits or CIS25 tax overpaid because of a carry-back of non-trading deficit on loan relationships - the due date of the AP in which the deficit arises (S826(7C) ICTA 1988).
CT, IT, S242 tax credits or CIS25 tax overpaid because of a carry-back of surplus ACT - the due date of the AP of surplus ACT (s826(7A) ICTA 1988).
CT, IT, S242 tax credits or CIS25 tax overpaid because of the set off of surplus ACT released by the carry-back of trade losses to a period not wholly within the preceding 12 months - the due date of the AP in which the losses arise (S826(7AA) ICTA 1988).
CT, IT or CIS 25 tax overpaid because of the set off of surplus ACT released by the carry-back of non-trading deficit on loan relationships - the due date of the AP in which the deficit arises (S826 (7CA) ICTA 1988).
S419(4) for loans made in APs ending after 30 September 1993 but before 31 March 1996 - the date the loan or part loan was repaid (S826(4) ICTA 1988).
S419(4) for loans made in APs ending on or after 31 March 1996 and not starting on or before 1 July 1999 - the later of the due date for the AP in which the loan was made, if the loan or part of it is repaid before nine months after the end of that AP or the due date for the AP in which the loan or part loan was repaid, if the loan was repaid more than nine months after the end of the AP in which it was made (S826(4) ICTA 1988.
Material dates - CTSA
For CTSA APs the material date is the later of the due date, which is the date in list A below (No carry-backs) or list B below (Carry-backs) or the date the tax being repaid was paid.
List A (No carry-backs):
CT - the due date.
CIS25 or SC60 - the due date.
IT and Franked Investment Income - the day after the end of the AP.
Foreign Income Deduction or Advance Corporation Tax - the due date. There is no entitlement to repayment before the material date is reached.
S455 CTA 2010 for a loan or part loan repaid on or before nine months after the end of that AP - the due date for the AP in which the loan was made.
S455 CTA 2010 for a loan or part loan repaid more than nine months after the end of the AP in which it was made - the due ate for the AP in which the loan, or part, was repaid (S826(4) ICTA 1988).
Research & Development, Land Remediation and Tax Credit - the later of the statutory filing date of the return or amended return for the AP for which credit is claimed or thedate on which the return or amended return containing the claim is delivered.
List B (Carry-backs):
CT, IT or CIS25 tax overpaid because of a carry-back of trade losses to a period wholly within the preceding 12 months - the due date of the AP for which the tax was overpaid (S826(2) ICTA 1988).
CT, IT or CIS25 tax overpaid because of a carry-back of trade losses to a period not wholly within the preceding 12 months - the due date of the AP in which losses arise (S826(7A) ICTA 1988).
CT, IT or CIS25 tax overpaid because of a carry-back of non-trading deficit on loan relationships - the due date of the AP in which the deficit arises (S826(7C) ICTA 1988).
CT or CIS25 tax overpaid because of a carry-back of DTR to an earlier period - the due date of the AP in which the DTR arose (S826(7BB) ICTA 1988).
CT, IT, S242 tax credits or SC60 tax overpaid because of a carry-back of surplus ACT - the due date of the AP of the surplus ACT (s826(7AA) ICTA 1988).
CT, IT or CIS25 tax overpaid because of the set off of surplus ACT released by the carry-back of trade losses to a period not wholly within the preceding 12 months - the due date of the AP in which the losses arise (S826(7AA) ICTA 1988).
CT, IT or CIS 25 tax overpaid because of the set off of surplus ACT released by the carry-back of non-trading deficit on loan relationships - the due date of the AP in which the deficit arises (S826 (7CA) ICTA 1988).
S458 CTA 2010 for loans made in APs ending on or after 1 July 1999 for a loan or part loan repaid on or before nine months after the end of that AP - the due date for the AP in which the loan was made.
S458 CTA 2010 for loans made in APs ending on or after 1 July 1999 for a loan or part loan repaid more than nine months after the end of the AP in which it was made - the due ate for the AP in which the loan, or part, was repaid (S826(4) ICTA 1988).
CT, IT or CIS25 tax overpaid because of the carry-back of surplus ACT - the due date of the AP in which the surplus ACT arises (S826(7) ICTA 1988).
Missing or alleged payment
A company or agent may receive an application for payment, but believe that the liability has already been paid. When the payment is not shown on their record, the payment is known as a missing or alleged payment.
Monetary Event
A monetary event is an action on the AP which gives rise to the recording of one or all of a charge, payment or reallocation.
MUID
MUID is the abbreviation for Management Unit ID. Each office with access to COTAX has an MUID. For example, 262300 relates to Central London office.
Multiple returns
If a return is captured that has the ‘Are you filling more than one return for this company now?’ box checked, COTAX sets the ‘Multiple Returns’ signal on the company to inhibit all reallocations and repayments for all APs and which can be viewed in function MRSC (Maintain Repayment / Reallocation Signals (Company) and makes an entry in Work List ORUR (Overpayments Requiring Urgent Review) if there is an overpayment, with the Reason for Entry ‘Multiple Returns’.
This is to prevent any overpayment being repaid automatically when a self assessment is recorded for an overpaid AP, before a self assessment is recorded for an underpaid AP.
You can view the signal in Function MRSC (Maintain Repayment / Reallocation Signals (Company).
COTAX unsets the ‘Multiple Returns’ inhibition automatically after 14 days.
The 14 days inhibition remains in force even if part of the overpayment is repaid or reallocated within the 14 days.
National agent file
COTAX holds a national agent file with full details and the Agent Id of every agent who acts for a company on COTAX.
Nominated company
The nominated company is the company in a group which accepts responsibility under the Group Payment Arrangement contract for discharging the CT liabilities of the other participating companies.
It must be resident in the United Kingdom.
Notice to deliver
A notice to deliver is the official notice issued to a company requiring it to deliver a CT return or returns, for a specified period.
Notices are issued on a form CT603.
O
OAS
OAS stands for the Overpayments and Accounting Summary and is a Banking Operations IT system used to temporarily hold payments that cannot be allocated to a specific taxpayer record and deal with certain accounting tasks that cannot be performed within the COTAX and ITSA computer systems.
Examples include making credit and debit bank lodgement adjustments, payments returned by the bank and transferring payments to liability held on other systems.
The OAS reference number is a nine character reference allocated to any payment for which an OAS record has been opened.
ODS
ODS stands for the Online Data Store. COTAX supplies it with data relating to registered companies and agents and enables CT Online Services to access that information.
The Official Receiver
An official of the Insolvency Service, which is a part of the Department for Business, Innovation and Skills (BIS).
He or she normally deals with companies that have no realisable assets, and therefore of no interest to professional insolvency practitioners.
Oil and gas companies
Oil and gas companies are those involved in the exploration and development of oil and gas resources within the UK, its territorial waters or the UK continental shelf.
Oil Taxation Office
The Oil Taxation Office (OTO) is responsible for assessing the liabilities of oil and gas companies, dealing with ACT and IT-CP returns and assessments for oil and gas companies, making assessments on non-resident companies under Section 38 Finance Act 1973 and performing the recovery activity (proceedings in the High Court) of the Enforcement & Insolvency Service.
OTRS
OTRS stands for the Online Tax Registration Service.
A company can use the service when they have enrolled on the Government Gateway to give HM Revenue and Customs the information required by Section 55 Finance Act 2004, which is the duty of a company to give notice of coming within the charge to corporation tax, register for PAYE and VAT and set up a Business Tax dashboard to see a summary of its tax liabilities on one screen.
Outstanding amount
On a COTAX record, the outstanding amount is the total unpaid collectible amount for the AP. That is the total of tax, interest and penalties.
Overpayment
COTAX recognises an overpayment for an AP when the payments made, or treated as made by the company for that AP exceed the total of tax payable, any interest charged on tax paid late and any late filing penalty.
COTAX also recognises an overpayment on an individual duty type (tax, interest or penalty) if the payments posted to that duty type exceed the charge posted for it, even if the AP as a whole is not overpaid.
COTAX does not recognise an overpayment until a tax charge for the AP has been created by the recording of a self assessment or a revenue determination.
COTAX does not recognise an overpayment if an AP has been cleared NDR (No Determination Required).
This is the case even if the company then makes payments that exceed any liability for the AP, such as a fixed late filing penalty.
Overseas address
An overseas address is one which is not within the United Kingdom, Isle of Man or Channel Islands.
P
Parent company
A parent company owns a majority of the shares of a subsidiary company.
COTAX cannot recognise the relationship between companies. You must decide the reference of the parent company and enter it on the subsidiary’s record using Function ACTP (Amend CT Payer details).
Participating company
A participating company is any company in a group, including the nominated company, that is subject to a group payment arrangement (GPA) for a particular Group Payment Period.
Only the nominated company has to be resident in the UK.
No company can participate in more than one GPA for a particular AP.
Payment
COTAX deals with the following posting types as a payment.
Bank lodgement payments.
Bank giro payments.
Bacs payments.
CHAPS payments.
Local office payments.
District set-offs.
Reallocations within COTAX records.
Reallocations to and from overpayments.
Loss carry-back postings.
Relief under S458 CTA210.
ACT carry-back postings.
Payment in euro
From 1 January 1999, companies have been able to make payment in euro.
Banking Operations deal with euro payments and the company’s record is normally updated for cheque payment, three days after Banking Operations receives the cheque, for Bacs payment, one working day after Banking Operations receives notification of the credit and for CHAPS payment, up to two working days after the credit is received in the Banking Operations account.
The administrative cost of converting a payment in euro to sterling is met by the Exchequer. Companies bear the cost of converting non-euro foreign payments.
The company bears the risk of any change to the exchange rate between the date the payment is made to the date it is converted. Any underpayment is recovered by normal pursuit methods and any overpayment repaid in sterling.
Payslip reference
The payslip reference appears in the format ‘1234567890 A001 01 A’, and determines how the payment is allocated.
The payslip reference is made up as follows.
1234567890. The 10 digit unique reference (UTR).
A001. The Head of Duty and case Id, always A001 for CT.
01. The AP number as shown on COTAX.
A. The Duty type.
PDF stands for Portable Document Format and is a file format used to represent documents in IT systems.
Period of account
The period for which accounts are prepared by a company.
Period of responsibility - agent
This period is a specified AP or APs, for which the company authorises an agent to act.
You only need to specify a period of responsibility if two or more agents are acting for the company but in relation to different APs or the company has told you that the agent will only act for the company in relation to a specific AP or APs.
A common example is where an agent acts generally for a company but a different agent is asked to represent the company for an AP that is under enquiry.
If you do not specify a period of responsibility, COTAX assumes that the agent is acting for all APs.
Period of responsibility - office
This period is a specified AP or APs for which an office is responsible.
A period of responsibility is only required when two or more offices are responsible for a company record, but in relation to different APs.
A common example is where an office takes responsibility for a particular AP that is under enquiry.
If no period of responsibility is specified, COTAX assumes that the current office is responsible for all APs.
PLA
When the permanent local action (PLA) signal is set, all APs are subject to clerical pursuit in the Debt Management Office and no payment applications are issued automatically and APs that are already LA remain LA.
The PLA signal may be set by the operator using Function RTPP (Revise Taxpayer Pursuit) providing the operator is the case owner and pursuit status is AUTO, LA or LA-ENF.
When the signal is unset each AP recommences the normal pursuit sequence.
Postponement status
If an appeal has an associated postponement, the postponement has one of the following status indicators.
‘By Agreement’ when the postponement application has been accepted.
‘Disputed’ when the caseworker does not agree the amount postponed and has made an alternative proposal.
‘By determination’ when the amount of the postponement is determined by the Tribunal or notified by the decision maker.
‘Closed’ when the appeal is determined or withdrawn, or when a postponement application is withdrawn.
PRFI
When the permanent referred for instruction (PRFI) signal is set, all APs are subject to clerical pursuit in Banking Operations, and no payment applications are issued automatically.
The PRFI signal may be set by the operator using Function RTPP (Revise Taxpayer Pursuit) providing the operator is the case owner and pursuit status is not LA, PLA or RFI.
When the signal is unset, each AP recommences the normal pursuit sequence.
Profits
Profits are profits chargeable to CT plus franked investment income that has not been received from a company in the same group.
Pursuit status
The pursuit status shown for each AP is one of the following.
Cleared. There are no outstanding amounts on the AP.
Auto. The case is being worked by COTAX.
LA. The case is working with the Debt Management Office.
PLA. The case is working with the Debt Management Office.
RFI. The case is working with Banking Operations or Debt Management Office.
PRFI. The case is working with Banking Operations.
LA-ENF. Recovery action has started; the case is working with the Debt Management Office.
Suspended. The amount has been suspended and the case is not working locally.
Overpaid. The case is overpaid and is not working locally.
Q
Quarterly instalment payment
For APs ending on or after 1 July 1999, large companies are required to pay their CT in instalments rather than in one lump sum nine months and one day after the end of the AP. These cases have a signal for ‘Quarterly Instalment Payments’ (QIPs).
A large company is broadly one with profits of more than £1.5 million, or less if a company is grouped or associated with others. There are two exceptions. A company is not ‘large’ if the tax payable is £10,000, or less for APs ending after 30 June 2000. The limit is proportionately reduced if the AP is less than 12 months, the company’s profits are below £10 million, or less if the company is associated with others and also proportionately reduced if the AP is less than 12 months and it was not large in the 12 months preceding the AP.
If a large company makes a payment that is before the instalment due date, credit interest may be payable on the amount paid early or overpaid but only from the date the first instalment was due, later than the instalment due date but earlier than the normal due date of nine months and one day after the end of the AP, credit interest is payable on any amount paid before the instalment due dates or overpaid and debit interest is charged on any amount paid after the instalment due dates or underpaid and later than the normal due date for the AP, the company may be charged two types of interest, calculated at different rates: debit interest charged to the normal due date and late payment interest charged from the normal due date.
Notes:
1.COTAX automatically calculates and posts credit or debit interest when there is a tax charge on record and the normal due date has passed. See COM80000 onwards for exceptions to automatic calculation.
2.For QIP cases where the liability is known, pursuit of any outstanding liability begins from the final instalment due date.
For more information on quarterly instalment payments, see COM95000 onwards.
Quarterly payer
A quarterly payer is a large company, which is broadly one with profits of more than £1.5 million, or less if a company is in a group with others, which is required to pay their CT in instalments rather than in one lump sum nine months and one day after the end of the AP.
Further information is in the Company Taxation Manual at CTM92505 onwards and at COM95000.
COTAX sets the quarterly payer signal to either ‘No’ or ‘Potential’ based on the value of the signal for the previous AP.
If the previous AP was ‘No’, the next AP is set to ‘No’.
If the previous AP was ‘Yes’ or ‘Potential’, the next AP is set to ‘Potential’.
The AP keeps its inherited value until a return is received and recorded on COTAX. The system then changes it to ‘Yes’ or ‘No’, depending on the entry in the quarterly instalment payments box on the return.
You change the signal manually using Function MAPS (Maintain AP Signals) or RAMA (Record / Amend Assessment).
R
Reallocation number
All repayments are allocated a reallocation number that you can see on the View Repayment Details screen of VPPD.
Registered avoidance schemes
Promoters who devise and market certain tax schemes and arrangements must disclose all new schemes to HMRC.
HMRC registers the schemes and gives them an 8 digit reference number. Companies using the schemes have to notify us on their return form, showing the reference number of the scheme and the AP in which it obtains or expects to obtain a tax advantage by virtue of the arrangement.
Registered office
The registered office (RO) is the address at which the company is registered at Companies House.
Repayment interest
If tax has been paid for an AP ending after 30 September 1993 and there is an overpayment of tax which is to be repaid or reallocated, the overpayment potentially attracts repayment interest under Section 826 ICTA 1988.
Repayment interest runs from the material date to either the date when the repayment is issued or the EDP allocated to a reallocation. You can find more information on the material date in the glossary entry for the term.
When calculating repayment interest, COTAX selects individual ‘payment type’ postings up to the value of the overpayment strictly in EDP order, starting with the most recent.
Notes:
1.From 25 February 2002, if credit interest and / or repayment interest is present on an AP, these postings are the last to be used in a reallocation.
2.There is no repayment interest due when repaying tax charged by assessments under Schedules 13 or 16 ICTA 1988.
REPE
REPE stands for Recovery & Enforcement Process Extension. It is the name given to processes for handling the recovery and enforcement of outstanding amounts once they have been referred to the Debt Management Office.
Return period
The period for which a CT return is required under Para 5 Schedule 18 FA 1998 for a CTSA AP or Section 11(2) TMA 1970 for a CT Pay and File AP.
Revenue amendment
At the end of an enquiry, the caseworker has the power to issue a closure notice and amend the company’s return.
Within the 30 days following the date of issue of the revenue amendment, the company can appeal against the amendment and request postponement of all or part of the additional tax charged, pending settlement of the appeal.
Revenue determination
Where no CTSA return is delivered in response to a notice to deliver, an officer of HMRC can to the best of his or her knowledge and belief, determine the amount of tax payable by the company.
A revenue determination can usually be made 18 months after the end of the period specified in the notice to deliver or, if later three months after the notice to deliver is served
If it is possible to ascertain the filing date, then we can make a revenue determination at any time after the filing date.
Tax charged on a revenue determination can be enforced as if it were a self assessment.
A company has no right of appeal against a revenue determination. It can only be replaced by a self assessment.
Review officer - appeals
Customers are entitled by law to a review by HMRC of its appealable tax decisions. So where a company disagrees with an HMRC decision or assessment and wants a review, HMRC must carry out a review of its decision. This review is carried out by a review officer, who is outside the direct line management chain of the decision maker and was not involved in making the decision.
For more information, see the Appeals, Reviews and Tribunals Guidance (ARTG) Manual.
Revised filing date
A caseworker can revise the filing date if an AP ends before the end of the period of account.
The revised filing date is the first anniversary of the last day of the period of account in which the return period ends.
Notes:
If the period of account is more than 18 months, the revised filing date for the return cannot be later than 30 months from the start of the period of account.
The company can deliver its return after the standard filing date but before the revised filing date without incurring a penalty.
RFI
When the referred for instruction (RFI) signal is set, the AP is subject to clerical pursuit and no payment applications are issued automatically by COTAX.
The signal may be set for an AP by the operator using function RAPP (Revise AP Pursuit) or function MAPS (Maintain AP Signals) or by COTAX where an ACT or loss-carry back claim results in repayment and / or reallocation or relief is given under Section 458 CTA 2010, because a loan, or part of it, has been repaid.
The AP remains RFI until any one of the following apply.
An operator unsets the signal.
An operator uses Function RAPP (Revise AP Pursuit) to issue a payment application.
The AP is cleared.
RP check
In a recovery case, the Higher Officer or Section Leader (Cashiers) is to be satisfied that the tax, penalty and / or interest is still unpaid on the day of intended proceedings.
The RP check is designed to avoid complaints caused by starting proceedings where some or all of the liability has already been paid.
Details of the RP check are in Recovery Manual REC1715 and it is essential that the procedure is scrupulously carried out.
S
S55 satisfied
Sections 55(1)(a) and (b) FA 2004 apply to companies coming within the charge to corporation tax on or after 22 July 2004. The company must tell us of the beginning of its first accounting period, the beginning of any subsequent accounting period that does not immediately follow the end of a previous accounting period.
The company must give us that information together with the other information specified in Section 55(2) FA 2004 and SI 2004 No 2502, not later than three months after the accounting period began.
Once the company has complied with that obligation the S55 Satisfied signal is changed to ‘Y’ using Function ACTP (Amend CT Payer Details).
S458 CTA 2010
Relief from tax assessed under Section 455 CTA 2010 where the loan or advance to a participator, or part of it, has been repaid.
SA enquiry
A self assessment (SA) enquiry is an enquiry by a caseworker into a company’s return.
Self assessment
A company’s self assessment must reflect the amount of tax payable by the company for the period concerned, based on the information on the return. It must take into account any relief or allowance claimed in the return or required to be given in respect of the AP.
Significant correspondence
This term related to filed papers in Banking Operations for an AP not presently LA or RFI, but which may become useful should the AP become either LA or RFI.
Simplified arrangement
The Corporation Tax (Simplified Arrangements for Group Relief) Regulations (SI 1999 No. 2975) introduced simplifications to the formal rules for making and revising group relief claims.
They set up arrangements for APs ended on or after 1 July 1999 that allow all claims and surrenders of losses and other amounts by companies in the group to be administered on their behalf by one company in the group.
They are aimed principally at larger and more complex groups of companies for which the full procedural rules for group relief would otherwise impose the greatest burden.
The regulations are concerned only with the administrative rules, provided by Part VIII of Schedule 18 Finance Act 1998, under which claims to and surrenders of group relief are made. Otherwise group relief is unaffected.
The benefits include provision for an ‘authorised company’ to amend group relief claims and surrenders on behalf of all participating group companies by providing only one copy of the statement containing details of the changes, inclusion of group companies whose APs do not coincide exactly with those of the group as a whole and inclusion of consortium companies which can claim group relief from, or surrender group relief to, the group.
See the Company Taxation Manual at CTM97650 onwards for further information about the background to simplified arrangements.
Specified period
The specified period is the period shown on the notice to deliver a return.
This is often the return period, but if the company’s circumstances have changed it may be different.
Structured action request (SAR)
A structured action request (SAR) is an electronic notification that a company or agent can send to HMRC to notify a change of details. They send it using the CT online service and the amendments are automatically recorded on the COTAX record.
Companies and authorised agents can advise HMRC contact details such as a phone number, that details held are no longer valid and details of a new agent acting or that an agent has ceased to act.
Clubs and associations can also notify name and address changes and agents can advise HMRC of their own change of address.
Supplementary pages
Supplementary pages are submitted with the CT600 return form and are used where companies must provide further information in particular circumstances as follows.
CT600A. Loans or advances are made to participators by close companies.
CT600B. A UK company has a 25 per cent or greater interest in a foreign company that is controlled from the UK.
CT600C. Claims or surrenders are made under the group and consortium relief provisions.
CT600D. Claims are made under Schedule 19AB ICTA 1988 by insurance companies, including corporate members of Lloyd’s, or friendly societies.
CT600E. Claims are made to exemption by charities.
CT600F. Claims are made by companies that operate ships and are party to tonnage tax election.
CT600G. Claims are made by companies that have a Corporate Venturing Scheme.
CT600H. Companies have made cross-border royalty payments.
CT600I. Companies have ring-fence trade income.
CT600J. Companies need to disclose the use of tax avoidance schemes.
Suppressing output
COTAX allows you to suppress the issue of assessing and penalty printed output when you are using Function RAMA (Record / Amend Assessment) or Function PPEN (Prepare Penalty Determination).
As the company does not receive any printed output when you suppress it, you are only likely to do this in exceptional circumstances.
Suspense record
A payment intended for a COTAX AP is automatically allocated to the company’s suspense record where the intended AP does not match an AP on the company’s record or there is no charge on an AP with a status of ‘Exempt’ or ‘Superseded’.
Staff in Banking Operations may allocate a payment to the suspense record, for example where the AP is unknown, by clerically entering ‘PA’ as the AP details on the payslip when processing the payment.
The AP number allocated to all suspense records is ‘PA’.
Suspense payments are also known as payments in advance or in CT View L and P, payments on account.
T
Tax related penalties
A company becomes liable to these penalties if it is required to deliver a company tax return and fails to do so either within 18 months after the end of the AP or, if the filing date is later, by the filing date. These penalties are defined in FA 1998 as tax-related penalties for CTSA APs andhad no statutory name in TMA 1970, but were colloquially known as tax-geared penalties for CT Pay and File APs.
COTAX does not produce separate penalty output for CTSA and CT Pay and File APs so all penalty output refers to tax-related penalties. The term has either its statutory or plain English meaning depending on the legal context.
Taxpayer amendment
A company can amend its return at any time within 12 months of the statutory filing date where there is no enquiry in progress.
This time limit is not extended if the company delivers the return after the statutory filing date.
Where a company amends its return during the course of an enquiry, any amendment to the tax payable does not take effect until the enquiry is completed.
Transfer pricing adjustment
Transfer pricing legislation requires businesses to price transactions between connected persons on an ‘arms length’ basis, that is the amount an independent business would charge, for the purposes of tax calculations, where this increases the tax due in comparison with use of the actual price.
With effect from 1 April 2004 companies have to notify the following on their CT600 return form.
Companies that are not ‘small’ have to notify HMRC that they have made a compensating adjustment in their accounts under the transfer pricing rules.
Small or medium sized enterprises have to notify HMRC that they have made such transactions but are exempt from making a compensating adjustment in their accounts.
Transitional periods for penalties
From June 2003, COTAX extended the scope of automatic processing of late-filing penalties.
The concept of transitional periods was used to implement the changes and has no legal significance.
Since 9 June 2003, COTAX has automatically issued most main, further and amended flat-rate and tax-related penalty determinations. It normally does that 14 days after the penalty is incurred or circumstances change, unless prevented from doing so by an inhibition.
Before 9 June 2003, COTAX could only automatically issue main first and second flat-rate (F1 and F2) and second tax-related (TR2) penalties.
COTAX retained pre June 03 penalties processing for transitional periods to stop the revised processing from revisiting and making or amending penalties for 'old' APs,
A transitional period is one where the cycle of penalty occurrences for an AP starts before 9 June 2003.
Tribunal
The Tribunals, Courts and Enforcement Act 2007 (TCEA) created a new tribunal system to replace some 70 tribunals across government.
TCEA put in place a framework for a tribunal system with specialist Chambers handling particular types of appeal. From 1 April 2009 the Tax Chamber brought together matters previously heard by the General and Special Commissioners, the VAT & Duties Tribunal and the Section 704 ITA 2007 and Section 706 ICTA 1988 Tribunal.
The tribunal system consists of two tiers; the First-tier Tribunal and the Upper Tribunal. The First-tier Tribunal initially hears most appeals. Decisions of the First-tier Tribunal may be appealed to the Upper Tribunal, which replaced the high Court in England and Wales, provided the appeal is on a point of law and the First-tier Tribunal or Upper Tribunal has given permission, or leave in Northern Ireland.
Appeals against the decisions of the Upper Tribunal are made to the relevant appellate court where they are on a point of law and have permission, or leave in Northern Ireland, from the Upper Tribunal or relevant appellate court. The relevant appellate court is the Court of Appeal in England and Wales, the Court of Session in Scotland and the Court of Appeal in Northern Ireland.
A small number of appeals may initially be heard by the Upper Tribunal on the agreement of the parties and with the consent of the Chamber President. These appeals are likely to be those where there are substantial and complex points of law and limited facts to be found.
For more information, see the Appeals, Reviews and Tribunals Guidance (ARTG) Manual.
U
Upper limit
Where profits for a company exceed this amount, CT is charged at the main rate. See Part 3, Section 24 CTA 2010.
UTR
The UTR (unique taxpayer reference) is a set of ten numerals allocated automatically by COTAX when a company’s record is set up.
V
Validation rules
HMRC publishes a set of validation rules to show the structure, format and validation requirements that are required for filing a CT return using the CT online service. This includes form CT600, supplementary Pages, accounts, computations and other documents.
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Y
Your Balance
This is the initial entry screen in the CT View L and P application, displayed after you have selected a company to view.
It shows the amount owing to HMRC or the company, a list of the APs from which the total displayed is made up or a message that there are no outstanding AP balances to display.
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