COM30050 - Background: company taxation overview: corporation tax self assessment
Although the Self Assessment legislation in the 1994 (and subsequent) Finance Acts was mainly focused on income tax, the rules also provided the basic framework for
- A Self Assessment regime for companies
And
- Other bodies within the charge to CT
From the outset, the plans were for CT Self Assessment (CTSA) to be introduced after a period of time to allow
- CT Pay and File to settle down
- ITSA to be assimilated
And
- The Department’s computer developments to take place
This was catered for by providing that the new rules would only apply to APs ending on or after an ‘appointed day’.
The Chancellor of the Exchequer announced, in his November 1997 pre - Budget statement, that the appointed day would be 1 July 1999.
So CTSA applies to all company APs ending on or after 1 July 1999.
Also in his pre - Budget statement, the Chancellor announced further reforms to the company tax regime, including the
- Abolition of Advance Corporation Tax (ACT)
And
- Introduction of a ‘modern system for corporation tax payments’
Under this ‘modern system’ the largest companies pay their CT by instalments, based on ultimate liability, and are subject to Debit Interest (Word 31KB) if late payment of the instalments arises. For further information, see the following subjects in this section
- ‘Quarterly Instalment Payments’ (COM30110)
And
- ‘Credit and Debit Interest’ (COM30060)
The Finance Act 1998 provided an opportunity to recast much of the original legislative framework for CTSA, by
- Bringing the provisions together in one place - Schedule 18 FA 1998
And
- Drafting them in a new user-friendly style
CTSA was essentially concerned with the conversion of the CT Pay and File system into a fully fledged Self Assessment regime. The impact of CTSA was consequently less dramatic than the impact of ITSA.
It affects around 1 million taxpayers, including about
- 40,000 public limited companies
- 936,000 private limited companies
And
- 54,000 members’ clubs and other unincorporated associations
For legislation applying to this subject, see COM30021.
