COM53001 - Claims / reliefs: other reliefs: introduction
This section is aimed primarily at offices with responsibility for the COTAX company record and deals mainly with relief under S458 CTA 2010, capital allowances and group and consortium relief. However, some information and examples may be of interest to Accounts Office and Debt Management office staff.
Debt Management office and the CT Unit Cumbernauld staff are more involved with the interest consequences of a relief rather than with the giving of the relief itself. There is guidance at COM80000 onwards on dealing with interest and objections received against charges made.
The remainder of this subject is presented as follows.
Relief under S458 CTA 2010
Claims to capital allowances
Claims to group relief
Relief under S458 CTA 2010
A company can claim relief under S458 CTA 2010 against S455 liabilities in respect of loans to participators included in a close company’s tax return.
S458 claims have to be made in one of the following ways.
- In the return.
- By amending the return for the AP in which the loan was made.
- Separately under the Schedule 1A TMA1970 rules once the time limit for amending the return has passed.
There are interest consequences of S458 relief that COTAX is unable to handle without manual. This happens when a loan is repaid, released or written off more than nine months after the due date (Word 49KB) of the AP in which the loan is made. The relief is deferred under S458 until the due date of the later AP in which the repayment, release or write-off takes place.
The CT600 company tax return allows a single entry of net S455 liability, which is captured onto COTAX. The detail of loans and repayments made are required on the CT600A supplementary page to the return. You can see the supplementary page using View CT Returns, but the information is not recorded on COTAX.
Technical Caseworkers must intervene in these cases because they are responsible for making sure that any interest is correctly calculated and for making any repayments that COTAX will not make automatically.
The CT Unit Cumbernauld is responsible for calculating and charging any interest COTAX cannot handle automatically, but they are dependent on you to pass on relevant information using form CT250(P), which you can find in SEES.
Claims to capital allowances
Part IX Sch 18 FA 1998 contains provisions governing claims for capital allowances for CTSA APs.
The claim, and any amendment or withdrawal of it, must be included in the original return for the AP of claim, or in an amendment to it. Once made, capital allowances claims can only be amended or withdrawn by amending the company tax return.
Claims must quantify the relief claimed.
Capital allowances claims can be made, amended or withdrawn up to one year after the filing date (Word 42KB) for the return. That time limit can be extended if we enquire into the return.
If a claim to capital allowances reduces the capital allowances available for another AP for which the return has already been delivered, the company must amend the return for that other AP within 30 days.
Claims to group relief
Part 5 of CTA 2010 contains provisions governing claims to group relief for CTSA APs.
The provisions stipulate that an amount surrenderable as group relief will be determinable in the hands of the surrendering company, independently of the claimant company’s claims.
- Group relief claims and consents to surrender must be made in the return, or an amended return, for the period to which the claim relates.
- Claims must be for specific amounts.
- Claims require the consent of the surrendering company, and a copy of the notice of consent must accompany the claim.
- Claims cannot be varied, though they can be withdrawn and replaced by a fresh claim within the normal time limits for making a group relief claim. This can only be done by amending the return in which the claim is made.
- HMRC has the power to allow late claims and withdrawals.
Group relief claims can always be made or withdrawn up to one year after the filing date. That time limit can be extended if we enquire into the return.
There are provisions:
- permitting a surrendering company to withdraw and replace a notice of consent
- requiring the surrendering company, if the amount available for surrender is reduced to less than the amount surrendered, to withdraw and (if appropriate) replace the previous notices so that the amount surrendered does not exceed the amount available
- placing a duty on the claimant company to amend its return in the above circumstances, if it can
- requiring a surrendering company to amend its return for a later AP or APs if it surrenders a trading loss that has been relieved by carry-forward under ICTA S.393(1).
Some simplification of the formal rules for making and revising group relief claims is provided by the Corporation Tax (Simplified Arrangements for Group Relief) Regulations (SI 1999 No. 2975). In particular, the regulations allow group relief claims to be made without attaching a copy of the related notice(s) of surrender.
Transferable Tax History
Following the introduction of the Transferable Tax History (TTH) legislation introduced in Finance Bill 2018 to 2019, this guidance briefly details the process for dealing with claims from the oil and gas industry, which will be handled by Oil and Gas Specialist teams. Additional guidance can be found in the Oil and Gas manual. Oil Taxation Manual
When a company acquires an O&G asset, as a condition of the contract they may also receive some TTH. Relevant profits and charges are quantified, agreed and reported to HMRC in a joint election and the sellers COTAX records are adjusted for the relevant AP via Function RAMA and a charge on the buyer is raised in ETMP.
A claim for losses to be set against TTH can only be made when decommissioning expenditure exceeds net profits from the TTH asset over the accounting periods since its acquisition. The buyer will make the claim in their CT600 by ticking box 45 to indicate a “claim or relief affecting an earlier period” and completing Supplementary page CT600i. If the claim is accepted Oil and Gas Specialist teams will reduce the ETMP accordingly. Any resultant overpayment can then be set off or repaid.