Where an accounting period straddles the beginning of a
financial year for which the first and second relevant amounts or
the lower and upper relevant maximum amounts as in
CTM03510 and
CTM03520 differ from those of the
preceding financial year, the two parts of the accounting period
are treated for the purposes of the CT starting rate or small
companies' relief as if they were separate accounting periods. The
profits (
CTM03600) are apportioned between those
parts on a time basis (ICTA88/S834 (4)). The profits for each part
are then compared with the appropriate proportions of the relevant
amounts for the financial year in which each part falls.
If the profits in either part fall between the appropriate
proportions of the first and second relevant amounts or the lower
and upper relevant maximum amounts, it is necessary to apportion
the basic profits (
CTM03505) on a time basis and to compute
marginal relief as if each part is a separate accounting period.
Authority for apportionment is given by the Finance Act for the
year in which the amounts change.
The parts are also to be treated separately in restricting
the limits to take account of associated companies (
CTM03570 and
CTM03580). The limits for one part are
not to be reduced in respect of a company that is associated only
during the other part.
For any accounting period straddling 1 April 2000 (when the
CT starting rate was introduced), FA99/S28 (7) gives authority to
treat the two parts of the straddling accounting period as if they
were two separate accounting periods for the purposes of
ICTA88/S13AA. Where there is a claim under ICTA88/S13AA in relation
to the part of the accounting period beginning with 1 April 2000,
the straddling period will be treated as two separate accounting
periods for the purposes of ICTA88/S13 as well.
If the fraction or rate changes, but the relevant amounts
remain unchanged, apportionment of the amount computed under
Section 13 (2) or Section 13AA (2) (
CTM03540) is required so that the
different fractions or rates can be applied (see
CTM03653). This apportionment does not
mean that the two parts are to be considered separately in
restricting the limits to take account of associated companies.
