Section 270 | Amount charged

(A1)Where a person is chargeable to domestic top-up tax for an accounting period as, or in respect of, a qualifying entity which is a member of a group, the amount (if any) the person must pay is determined as follows—^F1

Step 1Determine (in accordance with section 272)—

whether the entity has a top-up amount for that period, and

the extent of any such amount.

Step 2If the result of Step 1 is not expressed in sterling, convert the result of that Step to sterling.

(1)Where a person is chargeable to domestic top-up tax for an accounting period as or in respect of a qualifying entity which is not a member of a group, the amount (if any) the person must pay is determined as follows—^F2F3

Step 1Determine (in accordance with section 273) whether the entity has any top-up amounts or additional top-up amounts for that period and the extent of those amounts.

Step 2Determine the sum of those amounts.

Step 3If the result of Step 3 is not expressed in sterling, convert the result of that Step to sterling.

(2)Generally, a qualifying entity will have a top-up amount for an accounting period if it has profits for a period and its effective tax rate (or, where it is a member of a group, that of its group) is less than 15%.

(3)Chapter 3 of this Part makes provision, principally by applying (with modifications) provisions in Part 3, for determining—

(a)the effective tax rate of a qualifying entity by reference—

(i)in the case of an entity that is a member of a group, to the profits of, and the taxes payable by, members of the group that are located in the United Kingdom, or

(ii)in the case of an entity that is not a member of a group, to its profits and to the taxes payable by that entity.

(b)those profits,

(c)which taxes (referred to as “covered taxes”) are to be considered in the determining effective tax rates,

(d)top-up amounts, and

(e)additional top-up amounts.

(4)The exchange rate to be used for a conversion to sterling required by Step 2 in subsection (A1) or Step 3 in subsection (1) is—^F4

(a)the average exchange rate published by the European Central Bank for the accounting period in question;^F4

(b)where no such rate is published by the European Central Bank, the average exchange rate published by the Bank of England for the accounting period in question;^F4

(c)where no such rate is published by either the European Central Bank or the Bank of England, such rate as appears, on a just and reasonable basis, to reflect the average exchange rate for the accounting period in question.^F4