Multinational Top-up Tax and Domestic Top-up Tax

MTT54400 - Administration: Payments and interest: Effect of group payments and recovery of group payments

Where a group member makes a payment of MTT on behalf of another member of the same group, under a group payment notice (see MTT54200) or otherwise, they are entitled to recover that amount from the other group member.

Where a group member makes a payment in respect of MTT (under a group payment notice or otherwise) the payment is not allowed as a deduction in calculating the partner’s taxable income.

Equally, the reimbursement of the payment by another group member is not to be treated as taxable income in hands of the recipient, or as a deduction in the hands of the payer.

References to taxable income and deductions include for Income Tax, Corporation Tax, Domestic Top-up Tax and Multinational Top-up Tax.

No payment, or reimbursement, of MTT is to be treated as a distribution for either Income Tax or Corporation Tax purposes.

This is set out in paragraphs 37-38, schedule 14 to Finance (No.2) Act 2023.

Effect on group payment notices

Where a payment is made in respect of an MTT liability by a member, and that liability is the subject of a group payment notice, both the outstanding liability and the amount due by virtue of the group payment notice will be reduced by the amount of the payment.

See MTT54210 for further guidance on payments in relation to a group payment notice.