Corporation Tax - Manufacturing Relief - “Road Marking” Companies

Introduction

It is the Revenue view that the processes involved in the operation of “road marking” companies include processes which are “construction operations” as defined in Section 17(1) Finance Act 1970. Accordingly, such operations are precluded from manufacturing relief by virtue of the provisions of Section 50(1)(b) Finance Act 1980.

Guidelines

Arising from a recent review of the method of operation involved in road marking, Revenue accepts that a substantial part of the overall processes would qualify for manufacturing relief. Arising from the review, it is accepted that 55% of overall turnover arises from 45% arises from “construction “manufacturing” and the remaining operations”.

These percentages are guidelines based on the review mentioned above. Any company claiming alternative percentages as between “manufacturing” and “construction operations” will be required to give details in support of these alternatives.

Practitioners should note that Revenue intends to adopt the above proportionate approach in relation to all companies engaged in road marking. In accordance with Self-Assessment principles, it is expected that “road marking” companies will submit their corporation tax returns on this basis.

Cases under Enquiry

Where the question of manufacturing relief is currently under enquiry with companies engaged in road marking, Revenue intends to adopt the above approach in resolving the issue. Companies not under enquiry, and who have filed returns on a different basis to that outlined above, will not be re-opened.