Claims and elections for Corporation Tax
Claims allow you to tell HM Revenue & Customs (HMRC) that your company or organisation is entitled to a particular tax relief. Elections allow you to choose a particular way of having your company or organisation's affairs treated for Corporation Tax purposes.
This guide explains how and when you can make a claim or election, and how to find out what information you need to include. It also explains how you can amend a claim or election if you change your mind or find you've made a mistake.
On this page:
- What is a Corporation Tax claim?
- What is an election for Corporation Tax?
- How do you make a claim or election?
- When should you make a claim or election?
- Revising a claim or election
- Compliance checks and claims and elections
- More useful links
What is a Corporation Tax claim?
A claim is when you tell HMRC that you're entitled to a relief that reduces either your company or organisation's taxable profit or the amount of Corporation Tax you have to pay.
For example, a claim for:
- capital allowances reduces your taxable profits
- Research and Development Relief reduces your tax bill (or you may be able to claim it as a cash sum if you don't have any Corporation Tax to pay)
What is an election for Corporation Tax?
An election is when your company or organisation can make a choice about what to do for Corporation Tax purposes. This may mean that your taxable profits or your Corporation Tax are calculated in a different way.
For example, you may in some circumstances be able to elect to have a business asset treated as a 'short-life asset' for capital allowances purposes. This would allow your company or organisation to 'write-off' the cost of the asset over its lifetime.
More on elections for short-life assets for capital allowances
How do you make a claim or election?
What to include in a claim
A claim must be complete and if possible, should be made in (or accompany) your Company Tax Return.
That means you need to state the amount of the claim in figures, and you must include enough information in the claim to fully describe what you're claiming for. You also have to provide specific information for certain reliefs, so it's essential to check the detailed rules before you claim.
You should send your claim or Company Tax Return to your Corporation Tax Office.
Find your Corporation Tax Office
More information on some of the claims that have their own special rules is available if you follow the links below.
How to claim for capital allowances
More about claiming relief for tax charged on directors' loans
Find out more about claiming Group Relief
What to include in an election
An election must be complete and if possible, should be made in (or accompany) your Company Tax Return.
This means that in an election you must clearly state what your company or organisation is choosing to do, and which accounting periods you're doing it for. There are restrictions on how often you can change some elections, and others apply indefinitely, so it's essential to check the detailed rules in the relevant HMRC manual.
You should send your election or Company Tax Return to your Corporation Tax Office.
Find your Corporation Tax Office
Read more about the conditions for making a claim or election
When should you make a claim or election?
How to make claims or elections after the deadline for amending your return
You should make a claim or election in your Company Tax Return, because the claim or election may affect your Corporation Tax calculations and how much tax you have to pay.
If, exceptionally, you don't make the claim in your return, and you're still in time to make an amendment to your return, then you can either:
- Send HMRC a completely revised (amended) return. You can do this online or by sending your amended paper return to your Corporation Tax Office.
- Make your claim separately, in writing, to your Corporation Tax Office. HMRC will treat your letter as an amendment to your return.
Some reliefs have specific time limits, and after a certain time you may not be able to claim at all. For example, claims for Loss Relief must be made within two years of the end of the accounting period when the loss was incurred. So don't delay your claim or you may lose out.
More about the time limit for making an amendment to your return
Find your Corporation Tax Office
Time limits for making claims and elections
Most claims and elections have a specific time limit. This is often the same as the time limit for delivering or amending your Company Tax Return.
If no specific time limit applies, then a time limit of six years from the end of the Corporation Tax accounting period to which the claim relates applies. The nature of some reliefs - such as carrying back a loss to a previous accounting period - means that you can't claim any relief until you've delivered your return to HMRC for the period in which the relief arises.
HMRC has announced that this six-year time limit to make a claim is changing. From 1 April 2010, the new time limit will be four years from the end of a Corporation Tax accounting period.
Read more about changes to HMRC time limits from April 2010
For many reliefs, including losses, capital allowances and Group Relief, HMRC can sometimes allow a late claim after the normal time limit has ended.
If you're making a claim (or election) after the deadline for amending your return has passed, then you should write to your Corporation Tax Office. If the claim is also being made after the normal time limit for making it, you should make that clear in your letter and explain why you think that HMRC should accept your late claim.
More about how HMRC handles claims made after the amendment deadline
Revising a claim or election
If you find you've made a mistake in a claim or election, you can correct it by amending your Company Tax Return - as long as you are within the time limit for amending your return. If you are too late to amend your return but you're still in time to amend the particular claim or election, you can make your amendment by writing to your Corporation Tax Office.
Find out how to make amendments after you've filed your return
Find your Corporation Tax Office
Compliance checks and claims and elections
HMRC can ask for more information about your company or organisation's claim or election by making a compliance check.
If the claim or election is included in your return, it may be checked as part of a check of that return.
HMRC compliance checks and enquiries for Corporation Tax
If the claim or election isn't made in a return or in an amendment to a return, HMRC may still check it but they use a slightly different process.
How HMRC checks claims and elections made separately from a return
