Finance Leasing Manual - FLM36.23

Catching-up charge: deemed periods of account

In order to calculate correctly the cumulative accountancy rental excess used to measure the 'catching up' charge a period of account is deemed to end immediately before the lease first comes with Part I (Paragraph 13 (2)(a) Schedule 12 FA 1997). That ensures that any rental excess arising from the beginning of the actual period of account in which the change of status occurs is properly recognised. The catching up charge is crystallised at the end of that deemed period of account.