OT21215 - Corporation Tax Ring Fence and Supplementary Charge

Supplementary Charge: Management Provisions

FA02/s92 and the new ICTA88/s501B together contain the management provisions for the supplementary charge introduced by FA02/s91. In essence, the supplementary charge is treated as if it were CT and all provisions relating to the administration of CT are treated as applying to the supplementary charge.

The supplementary charge forms part of a company's self-assessment. There is an extra box for it on the CT600 return and this is linked to a supplementary page containing the calculation.

In detail

• all enactments relating to returns, assessments, recovery, appeals etc in the Taxes Acts applying generally to CT shall be taken as applying to the supplementary charge - ICTA88/s501B(1),
• the Taxes Management Act 1970 has effect on the basis that any reference to CT in that act include reference to the supplementary charge - ICTA88/s501B(2), and
• in any regulations relating to the treatment of unrelieved surplus ACT, references to CT do not include any part of the supplementary charge and references to profits do not include adjusted ring fence profits - ICTA88/s501B(3).

There are also special rules to bring the supplementary charge into the provisions for instalment payments

• FA02/s92(2) inserts a further paragraph into TMA70/s59E(11) to bring the supplementary charge within the provisions determining when CT is due and payable and the regulations relating to payment by instalments,
• FA02/s92(3) adds the supplementary charge to the definition of tax in FA98/Sch18/Para1 for the purposes of company tax returns etc,
• FA02/s92(4) adds an additional step to the calculation of tax payable in FA98/Sch18/Para8 to take account of the supplementary charge,
• FA02/s92(5)-(9) contain technical amendments, the purpose of which is to ensure the provisions relating to the supplementary charge are not taken into account in calculating a company's profit for the purposes of the instalment payment regulations which determine whether or not a company is a large company.