COM30020 - Background: company taxation overview: comparison of CT pay and file with CTSA

Corporation Tax Self Assessment (CTSA) maintains much of the CT Pay and File framework, but with the following key differences

• Responsibility for assessing a company’s tax liability passes from HMRC to the company itself
• Every company tax return must include a self assessment (Word 28KB) 
• The delivery of a return creates a legal charge, without further action by HMRC
• HMRC has a fixed period of at least 12 months to decide to enquire into the return, and has the right to enquire into any return
• Finality comes by the passage of time, or following the formal closure of an enquiry
• The definition of ‘tax’ within the scope of the self assessment provisions includes the special tax charges, assessable as if they were CT, on
• Loans by close companies to their participators

• Controlled Foreign Companies (Section 747 ICTA 1988)

• HMRC staff no longer have to make separate CT determinations of trade losses and amounts relievable as group relief. Any negative figures (including capital losses) that are required to be included in a return become final with the return
• Companies whose profits exceed the ‘upper relevant maximum amount’ (URMA) - currently, £1.5M annually for a company with no associates - have to make instalment payments of tax. For more information see section ‘Quarterly Instalment Payments’ (COM95000 onwards) in the ‘Payments’ business area
• The Quarterly Instalment Payment provisions bring with them an entitlement to interest (credit interest (Word 34KB)) for companies that pay tax before the normal due date (Word 49KB), but credit interest applies to all companies, not just those affected by Quarterly Instalment Payments
• Credit interest and interest paid on repayments of tax are taxable, and interest charged on tax paid late is tax - deductible

For legislation applying to this subject, see COM30021.