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HMRC internal manual

Venture Capital Schemes Manual

VCT: investor income tax reliefs: ‘front-end’ income tax relief: assessments and claims cases

Income from employment

HMRC officers should give relief as a tax adjustment.

Enter the total amount on which relief is due, for example £5,000, then compute the tax adjustment at the appropriate rate, for example ‘Venture Capital Trust £10,000 @ 30% = £3,000.00’ for shares issued on or after 6 April 2006.

Income from self employment

There is no assessing descriptor for ‘front-end’ Income Tax relief. HMRC officers must therefore:

  • include the relief due as a tax adjustment
  • use the abbreviation ‘sundry’
  • include an explanation in the ‘notes’ field.

Claims cases

HMRC officers should give relief in the repayment computation (Function CL):

  • include the relief as a tax adjustment using the abbreviation ‘sundry’ (RM2560),
  • send a letter of explanation to the taxpayer.