VCM64080 - VCT scheme: reliefs: 'front-end' income tax relief: assessments and claims cases

Income from employment

Give relief as a tax adjustment using Format 2A of Functions AS (EP4471 onwards) and AR (EP4860 onwards).

Enter the total amount on which relief is due, for example £5,000, then compute the tax adjustment at the appropriate rate, for example ‘Venture Capital Trust £10,000 @ 30% = £3,000.00'.

The appropriate rates are:

• 20% for shares issued up to 5 April 2004,
• 40% for shares issued between 6 April 2004 and 5 April 2006, and
• 30% for shares issued on or after 6 April 2006 onwards.

Income from self employment

There is no assessing descriptor on CODA for ‘front-end' income tax relief. You must therefore:

• include the relief due as a tax adjustment,
• use the abbreviation ‘sundry',
• include an explanation in the ‘notes' field (CO3250).

Claims cases

You should give relief in the repayment computation (Function CL):

• include the relief as a tax adjustment using the abbreviation ‘sundry' (RM2560),
• send a letter of explanation to the taxpayer.