CTM93110 - CTSA: the filing obligation: delivery of return: must include SA

Under CTSA (accounting periods ending on or after 1 July 1999) companies must include an SA of the amount of tax payable in their company tax return.

Note: Unlike IT SA there is no facility for a Revenue calculation of the tax payable. Every company must include its own calculation with the return, no matter how early they deliver it.

For this purpose you regard a company tax return received as a return for an accounting period, if:

• the period is treated as an accounting period in the return,

and

• the period is not longer than twelve months.

FA98/SCH18/PARA8 sets out, in a number of steps, how a company should calculate its SA of tax payable. Unless otherwise provided, any reference in Schedule 18 to the amount of tax payable by a company for an accounting period refers to the amount shown as payable in the company's SA.

Tax payable for an accounting period is calculated as follows:

Step 1

Calculate the CT chargeable.

• Take the amount of the company's profits chargeable to CT for the period, and
• apply the rate or rates of CT applicable to the company.

Step 2

Give effect to any reliefs or set-offs available against CT.

• Marginal small company's relief.
• Double taxation relief.
• Advance CT.

Step 3

Add:

• any amount due under ICTA88/S419 (1)(tax on a loan or advance made by a close company to a participator)’
• any amount chargeable under ICTA88/S747 (4)(a) (tax on profits of a controlled foreign company.

Step 4

Deduct any amounts to be set off against the company's overall tax liability:

• IT borne by deduction.
• ACT paid in respect of FID.
• Repayable tax credits (such as research and development, land remediation, and vaccine research).

It must make the SA on the basis of the information in the return and after taking into account any reliefs or allowances.

Note that any tax deducted under the construction industry scheme (CIS) regulations is not included in the above calculation. For deductions suffered before 6 April 2002 CIS tax is available for set-off against the tax payable and is reported in the tax reconciliation section of the CT600.