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CREC073400 | Expenditure credit redemption: example 4 - credit received from group member

From HM Revenue & Customs · Creative Industries Expenditure Credit Manual

CT = Corporation Tax

AP = accounting period

Company 4Values
Profit£400,000
CT liability @ 25%£100,000
Credit for this AP£75,000
Credit brought forwardnil
Credit received from group member(s)£25,000
CT liability of other AP(s)nil
Other liabilitiesnil

PRE-STEP 1 RESTRICTION

The amount of credit brought forward and the amount of credit received from group member(s) are used, in that order, to discharge the CT liability for this AP.

-Values
Credit received from group member(s)£25,000
CT liability£100,000
CT liability after discharge£75,000
Excess credit received from group member(s)nil

If there were any excess credit remaining after discharge, it would be treated as if it had not been surrendered. The surrendering company should adjust its calculations as necessary.

STEP 1

The credit amount for this AP is used to discharge the remaining CT liability for this AP.

-Values
Credit for this AP£75,000
Remaining CT liability£75,000
CT liability after dischargenil
Credit remaining after dischargenil

STEPS 2 TO 6

As there is no more credit remaining after Step 1, there is no need to apply Steps 2 to 6.

SURRENDER TO GROUP MEMBER

If the company is a member of a group, it may surrender some or all of the amount withheld at Step 2, plus any credit brought forward and not used at the pre-Step 1 restriction, to any other member of the same group.

Company 4 has no amount of credit withheld at Step 2 or unused credit brought forward, so there is no need to consider a surrender.

AMOUNTS CARRIED FORWARD

Any amount withheld at Step 2 and/or any unused credit brought forward which is not surrendered to a group member is carried forward to the next AP.

Company 4 has no amount of credit withheld at Step 2 or unused credit brought forward, so there is no amount carried forward.