Section 217A | Introduction

(1)Where a company within the charge to corporation tax has unassessed transfer pricing profits for an accounting period, HMRC may assess those profits to corporation tax in accordance with this Part.

(2)Where the conditions in section 217C(1) are met, corporation tax is charged at the UTPP rate on unassessed transfer pricing profits assessed under this Part (instead of at the main rate or any other rate).

(3)The UTPP rate in relation to profits for an accounting period assessed under this Part means the sum of—

(a)the underlying corporation tax rate, and

(b)6%.

(4)In subsection (3) “the underlying corporation tax rate”, in relation to an amount of unassessed transfer pricing profits for an accounting period, means the sum of—

(a)the rate at which corporation tax would be chargeable on those profits if the amount of those profits were added to the amount of the company’s profits for the accounting period (which may be nil) on which corporation tax would otherwise be chargeable, and

(b)the percentage given by dividing the total of any amounts that would, ignoring this Part, be assessable or chargeable on the unassessed transfer pricing profits as if they were corporation tax (reduced by any reliefs that would be specific to those amounts) by the amount of the unassessed transfer pricing profits.

(5)Section 217B sets out when a company has unassessed transfer pricing profits and what the amount of those profits are.

(6)Chapter 2 sets out the conditions for a company to be assessed at the UTPP rate under this Part.

(7)Chapter 3 sets out the process to be followed in making an assessment (including provision for a company to be assessed not at the UTPP rate).

(8)Chapter 4 contains minor definitions.

(9)In Schedule A1—

(a)Part 1 sets out when a company has unassessed transfer pricing profits as a partner of a partnership,

(b)Parts 2 and 3 set out how Chapters 2 and 3 of this Part apply in that case, and

(c)Part 4 sets out how Parts 1 to 3 of the Schedule apply to a company as a corporate member of a Lloyd’s syndicate.