Group Payment Arrangements (Introduction)
Group Payment Arrangements (GPAs) are a customer service provided by HMRC at the request of groups made up of or containing large companies to help them cope with Quarterly Instalment Payments (QIPs). They are made under the authority of S36 FA 1998. This allows HMRC to enter into an arrangement under which one company pays the total liabilities of all or some of the companies in a group for specified APs. At least one of the companies should be liable, or expect that it will have to pay by Quarterly Instalment Payments.
Groups entering into a GPA make a contract with HMRC under which the Nominated Company will pay the amounts due and then apportion those payments between them, once there is a self assessment or Revenue Determination for each. The Nominated Company is not responsible for the actual tax liability of each company. The first GPAs were set up for APs ending on 31 December 1999, with a first instalment payment falling due in July 1999.
A Group Payment Arrangement Indicator appears on all CTSA APs viewed using Function DAPD (Display Accounting Period Details). Where the indicator is set to G this identifies the record as a Group Payment Record (GPR). If the indicator is set to P the company is a participator in a GPA for the AP displayed. The GPA UTR in which the AP is participating is also displayed.
A GPA applies to a Group Payment Period (GPP) or series of GPPs for which the group, and specifically the Nominated Company, draws up its accounts. The arrangement applies automatically to subsequent GPPs unless and until the arrangement is terminated.
A GPP may have a status of Open, Closed Cancelled or Cleared. The status of a GPP can be ascertained by viewing Function DAPD (Display Accounting Period Details) for the GPR or the relevant AP of a participating company in the GPA.
A group is defined for the purposes of S36 FA 1998 as a company and all its 51% subsidiaries, and their 51% subsidiaries, and so on. This is a much broader definition than applies, for example, to surrenders under S102 FA 1989 or for group relief purposes. The 51% group relationship must exist at the time the contract is signed and throughout the GPP. If this condition proves later not to have been met in respect of one or more of the participating companies, such companies will be removed from the arrangement. Branches of non-resident companies can be included in the arrangement, as can subsidiaries of non-resident parent companies.
The GPA contract covers if and when companies can be added or removed from the arrangement and termination of the arrangement.
The issue of an automatic tax-related penalty is inhibited where the Group Payment Arrangement Indicator in Function DAPD (Display Accounting Period Details) is set to P. The participating company will appear on Work List PENR (Penalties Requiring Review List) if a tax-related penalty is chargeable. Special rules apply to the calculation of any tax-related penalty on a participating company. For more information see the Company Taxation Manual (CTM) at CTM97570.
There is a Group Payment Team in Banking Operations (Cumbernauld and Shipley sites) which is responsible for making the GPA contract and running the GPA. You should refer any queries about setting up a GPA to them.
For more information about GPAs and for guidance about the impact in District Offices and procedures see the Company Taxation Manual (CTM) at CTM97405 onwards.
