On 9 February 2010 the Financial Secretary to the Treasury announced plans to introduce legislation to clarify the Corporation Tax treatment of manufactured payments received by companies in the course of certain sale and purchase (‘repo’) transactions.

The legislation is intended to ensure that manufactured payments must be taken into account in calculating profits chargeable to corporation tax if they are taken into account in computing accounting profits. The proposed legislation will apply from 1 October 2007 which is the date the repo legislation was introduced.

A copy of the draft legislation and draft explanatory notes is reproduced here.

The full text of the minister's statement can be read at http://www.hmrc.gov.uk/drafts/ministerial-statement 090210.pdf