CLAUSE 84 AND SCHEDULE 11: COMPANY TAX RETURNS ETC.
This clause and schedule provide for some minor and consequential amendments which flow from the introduction of company self assessment (CTSA). For accounting periods ending on or after 1 July 1999, the amendments replace various references in the Taxes Acts to provisions in the Taxes Management Act which do not apply for CTSA with references to the equivalent provisions in the CTSA legislation. The Schedule also repeals a group relief provision that is redundant for accounting periods ending on or after 1 July 1999 and corrects two textual errors in a CTSA provision dealing with appeal rights to the Special Commissioners.
DETAILS OF THE CLAUSE
Subsection (1) provides for Schedule 11 of the Bill to make minor and consequential amendments to the CTSA legislation.
Subsection (2) provides that the amendments have effect in relation to accounting periods ending on or after 1 July 1999.
DETAILS OF THE SCHEDULE
Paragraph 1 provides that section 411A ICTA 1988 (group relief in substitution for loss relief) will cease to have effect. Paragraph 72 of Schedule 18 FA 1998 is the equivalent self assessment provision.
Paragraph 2 amends section 588(5) ICTA 1988 (tax treatment of training courses provided for employees) by substituting a reference to the CTSA assessing power for the existing reference to the CT Pay & File assessing power. This will ensure that the existing power to recover tax from a company which has incorrectly claimed a deduction for training expenses will continue for CTSA accounting periods.
Paragraph 3 ensures that section 102(6) of the Finance Act 1989 (surrender of company tax refunded within a group) continues to work as intended by replacing a reference to a CT Pay & File penalty provision with the equivalent CTSA provision.
Paragraph 4 amends section 17(3) of the Capital Allowances Act (CAA) 1990 (carry back of balancing allowances for mining structures etc.) by making the cross-reference to section 42 TMA 1970 specific to income tax claims. For self assessment periods, corporation tax claims by companies are subject to the rules provided by Schedule 18 and so the reference to section 42 is unnecessary.
Paragraph 5 amends section 33F(1) of the CAA 1990 (procedure for claims for deferment of balancing charge) to remove a reference to Schedule A1 of that Act, which has been repealed, and replace it with the equivalent reference to Part IX of Schedule 18 FA 1998.
Paragraph 6 amends section 59C of CAA 1990 which makes supplemental provision for elections in respect of the disposal value of fixtures under section 59B. The amendment ensures that section 59C continues to work as intended by disapplying CTSA claims provisions that have the same general effect as those currently disapplied under CT Pay & File.
Paragraph 7 amends section 145(3) of the CAA 1990 (claim to give effect to corporation tax allowances against profits of any description) by removing a reference to section 42 of the TMA 1970 which is now redundant.
Paragraph 8 amends section 118 of the FA 1994 (notification requirement for expenditure on machinery or plant) by providing for the same rules relating to error or mistake claims to apply under CTSA as apply under CT Pay & File.
Paragraph 9 amends paragraph 94 of Schedule 18 to the Finance Act 1998 (company tax returns etc.: election to take appeal to Special Commissioners) by correcting two textual errors.
Clause 80 to 84, and Schedule 11, correct omissions, and make the minor and consequential amendments, to remedy minor technical defects that have been identified since the introduction, by Finance Act 1998 of core provisions for CTSA, payment of corporation tax by instalments and the abolition of ACT. A summary of these major changes is provided in the Background to the note on Clause 80.
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