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CTM93110 | CTSA: the filing obligation: Delivery of return: Must include SA

From HM Revenue & Customs · Company Taxation Manual

FA98/SCH18/PARA7 provides that companies must include an SA of the amount of tax payable for an accounting period in their company tax return.

Note: Unlike ITSA there is no facility for a Revenue calculation of the tax payable. Every company must include its own calculation with the return, no matter how early they deliver it.

For this purpose you regard a company tax return received as a return for an accounting period, if:

  • the period is treated as an accounting period in the return,

and

  • the period is not longer than twelve months.

FA98/SCH18/PARA8 sets out, in a number of steps, how a company should calculate its SA of tax payable. Unless otherwise provided, any reference in Schedule 18 to the amount of tax payable by a company for an accounting period refers to the amount shown as payable in the company’s SA.

Tax payable for an accounting period is calculated as follows:

Step 1

Calculate the CT chargeable.

  • Take the amount of the company’s profits chargeable to CT for the period, and

  • apply the rate or rates of CT applicable to the company, other than the restitution interest rate.

Step 2

Give effect to any reliefs or set-offs available against CT.

  • Marginal relief for companies with small ring fence profits, etc.

  • Corporate venturing scheme: investment relief.

  • Community investment tax relief.

  • Double taxation relief.

  • Advance CT.

Step 3

  • Add any amounts assessable or chargeable as if they were CT (reduced by any reliefs specific to those amounts):

  • any amount due under CTA10/S455 (1) or S464A (tax on a loan or, advance or benefit made by a close company to a participator)

  • any sum chargeable under CTA10/S269DA (surcharge on banking companies) or S330(1) (supplementary charge on ring fence trades)

  • any sum charged at Step 5 of TIOPA2010/S371BC(1) (tax on profits of a controlled foreign company).

  • any amount of the bank levy chargeable by virtue of FA11/SCH19/PARA50 or 51. If added, treat any deductions made at Step 4 below as made from all other amounts before being made from the amount of bank levy.

Step 4

Deduct any amounts to be set off against the company’s overall tax liability:

  • IT borne by deduction.

  • ACT paid in respect of FID.

Step 5

Calculate the CT chargeable on any profits of the company that are charged as restitution interest.

  • Find the amount in respect of which the company is chargeable for the period under the charge to CT on income under CTA10/Part 8C.

  • Apply the restitution payments rate in accordance with CTA10/S357YK(1).

  • Additionally, Para 11(4) Sch 16 FA20 requires the inclusion of any amount of tax chargeable under Para 8 in respect of coronavirus support payments to which the company was not entitled.

The amount of tax payable for the accounting period is the sum of the amounts resulting from Steps 1-4 and Step 5 together with any income tax chargeable in accordance with Para 8 Sch 16 FA20.

A company must make the SA on the basis of the information in the return and after taking into account any reliefs or allowances.