959AT Date for payment of corporation tax: groups.

(1) In this section—

“initial balance” means the amount represented by the formula—

A – B

where—

A is the amount of the initial instalment of preliminary tax paid by the surrendering company for the relevant period in accordance with subsection (2) of section 959AS, and

B is—

(a) where the relevant period started on the surrendering company coming within the charge to corporation tax—

(i) 45 per cent of the tax payable by the surrendering company for the relevant period, or

(ii) where subsection (4) of section 959AN applies in relation to that period, a nil amount,

or

(b) in any other case, the lower of—

(i) 45 per cent of the tax payable by the surrendering company for the relevant period, or

(ii) 50 per cent of the sum of the corresponding corporation tax for the preceding accounting period and the corresponding income tax for the preceding accounting period, which is payable by the surrendering company;

“final balance” means the amount represented by the formula—

C–D

where—

C is the amount of preliminary tax paid by the surrendering company for the relevant period in accordance with section 959AR(1) or section 959AS(2), as the case may be, and

D is 90 per cent of the tax payable by the surrendering company for the relevant period, or, where subsection (4) of section 959AN applies in relation to that period, a nil amount;

“relevant initial balance” means that part of an initial balance that is specified in a notice given in accordance with subsection (3);

“relevant final balance” means that part of a final balance that is specified in a notice given in accordance with subsection (3).

(2) This section applies where—

(a) a company (in this section referred to as the “surrendering company”) which is a member of a group pays—

(i) an initial instalment of preliminary tax for an accounting period (in this subsection referred to as the “relevant period”) in accordance with subsection (2) of section 959AS, being an amount which exceeds, or exceeds the lower of—

(I) 45 per cent of the tax payable by that surrendering company for the relevant period, and

(II) 50 per cent of the sum of the corresponding corporation tax for the preceding accounting period and the corresponding income tax for the preceding accounting period, that is payable by the surrendering company,

(ii) an initial instalment of preliminary tax for a relevant period which started on the surrendering company coming within the charge to corporation tax, being an amount which exceeds 45 per cent of the tax payable by that company for the relevant period,

(iii) an amount of preliminary tax for a relevant period in accordance with section 959AR(1) or section 959AS(2), as the case may be, being an amount which exceeds 90 per cent of the tax payable by the surrendering company for the relevant period, or

(iv) any amount of preliminary tax for a relevant period in respect of which subsection (4) of section 959AN applies,

(b) another company (in this section referred to as the “claimant company”) which is a member of the group pays—

(i) an initial instalment of preliminary tax for an accounting period in accordance with subsection (2) of section 959AS, being an amount which is less than, or less than the lower of—

(I) 45 per cent of the tax payable by the claimant company for the accounting period, and

(II) 50 per cent of the sum of the corresponding corporation tax for the preceding accounting period and the corresponding income tax for the preceding accounting period, which is payable by the claimant company,

(ii) an initial instalment of preliminary tax for an accounting period which started on the claimant company coming within the charge to corporation tax, being an amount which is less than 45 per cent of the tax payable by that company for the relevant period, or

(iii) an amount of preliminary tax for an accounting period in accordance with subsection (2) of section 959AS, being an amount which is less than 90 per cent of the tax payable by the claimant company for the accounting period,

or

(c) the accounting period in paragraph (b) coincides with the relevant period, and

(d) the claimant company is not a small company in relation to the relevant period.

(3) Where this section applies, the 2 companies may, at any time on or before the specified return date for the accounting period of the surrendering company, jointly give notice to the Collector-General—

(a) that subsection (4)(a) is to have effect in relation to the relevant initial balance, or

(b) that subsection (4)(b) is to have effect in relation to the relevant final balance.

(4) (a) Where this subsection has effect in relation to any relevant initial balance—

(i) an additional amount of preliminary tax equal to the relevant initial balance shall be deemed for the purposes of subsection (4)(b) of section 959AS to have been paid by the claimant company on the due date for the payment of the initial instalment of preliminary tax of that company for the relevant period if 100 per cent of the tax payable by the claimant company for the relevant period, disregarding this subparagraph, is paid on or before the specified return date for the relevant period, and

(ii) the surrendering company shall for the purposes of this section be treated as having surrendered the relevant initial balance to the claimant company and that relevant initial balance shall not be available for use by any other company under this section.

(b) Where this subsection has effect in relation to any relevant final balance—

(i) an additional amount of preliminary tax equal to the relevant final balance shall be deemed for the purposes of subsection (4)(d) of section 959AS to have been paid by the claimant company on the due date for the payment of the final instalment of preliminary tax of that company for the relevant period if 100 per cent of the tax payable by the claimant company for the relevant period, disregarding this subparagraph, is paid on or before the specified return date for the relevant period, and

(ii) the surrendering company shall for the purposes of this section be treated as having surrendered the relevant final balance to the claimant company and that relevant final balance shall not be available for use by any other company under this section.

(5) A payment for a relevant initial balance or for a relevant final balance—

(a) shall not be taken into account in computing profits or losses of either company for corporation tax purposes, and

(b) shall not be regarded as a distribution or a charge on income for any of the purposes of the Corporation Tax Acts,

and, in this subsection, “payment for a relevant initial balance or for a relevant final balance” means a payment made by the claimant company to the surrendering company in pursuance of an agreement between them as respects an amount surrendered in accordance with this section, being a payment not exceeding that amount.

(6) (a) This section does not affect the liability to pay corporation tax of any company to which the section relates.

(b) Where this section applies, the amount on which, but for this section, the claimant company is liable to pay interest in accordance with section 1080 shall be reduced by—

(i) any relevant initial balance deemed to have been paid by that company in accordance with subsection (4)(a)(i), or

(ii) any relevant final balance deemed to have been paid by that company in accordance with subsection (4)(b)(i).

(7) For the purposes of this section, 2 companies are members of the same group if and only if they would be such members for the purposes of section 411.