CTM97450 - CTSA: group payment arrangements: pre- acceptance checks

Normally, the group payment team only agree to set up a group payment arrangement if the group sends in the signed arrangement contract at least two months before the first payment due under the arrangement.

This is to make sure that there is sufficient time:

• to deal with any queries,

• to carry out the necessary liaison and setting up work before the first payments need to be accepted.

A director of the nominated company must sign the contract. This is a stricter requirement than applies to most forms, including the CT600 return.

That is because the document, once approved and signed by the group payment team on behalf of the Board, constitutes a contract between:

• the participating companies,

• the Board,

and places obligations on both parties that go beyond the scope of Taxes Acts.

There must be no scope for argument about whether the company signatory had the authority to commit the nominated company to such a contract.

Where, exceptionally, a director cannot sign the document himself, the signature of an officer of the company may be acceptable. This is only so if the director signs a specific letter accompanying the contract authorising that officer to sign the contract on behalf of the nominated company.

Only companies that are up to date with their filing and payment obligations can take part in a group payment arrangement.

The group payment teams check the COTAX record of every proposed participating company before agreeing to set up a new group payment arrangement. They will ask the Inspector ask for advice about any company which has not:

• filed a return,

• paid at least 75% of the tax currently shown as due,

for its last but one accounting period.

It is important to deal with referrals promptly as tight time limits apply to the setting up of group payment arrangements. You should advise the group payment team to accept the application if:

• you are satisfied with the general payment and filing record of the company concerned,

• you are satisfied that there is an acceptable reason for the late filing or payment on this occasion,

You should discuss the case with Head Office (This text has been withheld because of exemptions in the Freedom of Information Act 2000)before advising the group payment team to refuse any application.