United Kingdom corporation tax
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Corporation tax is a tax levied in the United Kingdom on the profits made by UK-resident companies and associations. It is also levied on non-UK resident companies and associations which trade in the UK through a permanent establishment. The tax was introduced by the Finance Act 1965, and has been levied from 1 April 1965. The Finance Act 1965 simultaneously removed companies and associations that became liable to corporation tax from the charge to income tax. The tax borrowed its basic structure and many of its rules from income tax, and it is only from 2003 onwards, when the Income Tax (Earnings and Pensions) Act was enacted, that the rules started to diverge.
Recently the tax has come under pressure from a number of sources. Tax competition between jurisdictions has reduced the headline charge to 30%; judgments from the European Court of Justice have found that certain aspects of UK corporate tax law are discriminatory under European Union treaties; and tax avoidance schemes marketed by the big accountancy and law firms and by banks have threatened the tax base. The British Government has responded to the last two by introducing ever more complex legislation to counter the threats.
At the same time, the complexity in the system is well recognised, and the Government, supported by the Opposition parties, is committed to widescale Corporation Tax Reform. However, as of 2005, the only legislation produced under this banner has been a rewrite of rules for calculating the deductible management expenses for companies with investment business and for life assurance companies.
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Method of charge
Corporation tax is an annual tax, which means it must be passed annually by parliament, otherwise there is no authority to collect it. Up until the Finance Act 1997, the charge was passed in that year's Finance Act: so the charge for the financial year beginning 1 April 1997 was imposed by the Finance Act 1997. In 1998 this changed - so the Finance Act 1998 imposed the charge for the 1998 and 1999 financial years, and the Finance Act 1999 imposed the charge for the 2000 financial year, and so on. The tax is charged in respect of accounting periods, which usually coincide with the 12 month period for which most companies prepare accounts known as financial statements..
Assessment
Unlike value added tax, which is levied on the sale of goods, corporation tax is levied on the net profits of the company. Therefore, except for tax paid by certain life assurance companies, it is borne by the proprietor. This makes it a direct tax, as opposed to an indirect tax, such as value added tax (a sales tax collected by retailers from the consumers on whom it is nominally levied).
Up until 1999 no corporation tax was due by a company unless the Inland Revenue raised an assessment to corporation tax on that company. A company was, however, under an obligation to report certain details to the Inland Revenue so that the right amount could be assessed. This changed for accounting periods ending on or after 1 July 1999, when self-assessment was introduced. Self-assessment means that companies are required to assess themselves to corporation tax and take full responsibility for that assessment. If the self-assessment is wrong through negligence or recklessness, the company can be liable to tax-geared penalties.
The self-assessment tax return needs to be with the Inland Revenue 12 months after the end of the period of account in which the accounting period falls. If a company fails to submit a return by then, it is liable to penalties. Also, the Inland Revenue may issue a determination of the tax payable, which cannot be appealed - however, in practice they tend to wait until a further 6 months have elapsed before doing so. Also, the most common claims and elections that may be made by a company have to be made by a company as part of its tax return, and they have a time limit of 2 years after the end of the accounting period. This means that a company submitting its return more than 1 year late suffers not only from the late filing penalties, but also from the inability to make these claims and elections.
From 2004 there has been a requirement for new companies to notify the Inland Revenue of their coming into existence. On 18 April 2005 the Inland Revenue was merged with Her Majesty's Customs and Excise to form Her Majesty's Revenue and Customs, which now deals with all matters concerning corporation tax.
HM Revenue and Customs audit
HM Revenue and Customs has one year from the normal filing date, which is one year after the end of the period of account, to open an enquiry into the return. This period is extended if the return is filed late. The enquiry continues until all issues that the Revenue wish to ask about a return are dealt with. However, a company can appeal to the Commissioners of Income Tax to close an enquiry if the Revenue delay.
If the Revenue and the taxpayer dispute the amount of tax that is payable, either may appeal to either the General or Special Commissioners of Income Tax. The Commissioners' decisions of fact are binding and can only be appealed if no reasonable Commissioner could have made that decision. However, appeals on points of law may be made to the High Court (Court of Session in Scotland), then the Court of Appeal, and finally, with leave, to the House of Lords.
Once an enquiry is closed, or, once the time has passed for opening an enquiry, the Revenue can only re-open a prior year if they later become aware of an issue which they could not reasonably have known about at the time, or in instances of fraud or negligence. In fraud or negligence cases, the Revenue can re-open years up to 20 years ago.
After a Revenue enquiry closes, or after final determination of an issue by the Courts, the taxpayer has 30 days to amend their return, and make additional claims and elections, if appropriate, before the assessment becomes final and conclusive. If there is no enquiry, the assessment becomes final and conclusive once the period in which the Revenue may open an enquiry passes.
Schedular system
Main article: Schedular system of taxation
In the United Kingdom the source rule applies. This means that something is taxed only if there is a specific provision bringing it within the charge to tax. Accordingly, profits are only charged to corporation tax if they fall within one of the following, and are not otherwise exempted by an explicit provision of the Taxes Acts:
| Scope | |
|---|---|
| Schedule A | Income from UK land |
| Schedule D | Taxable income not falling within another Schedule |
| Schedule F | Income from UK dividends |
| Chargeable gains | Gains as defined by legislation that are not taxed as income |
| CFC charge | Profits made by controlled foreign companies where no exemption applies |
Notes:
- In practice companies do not get taxed under Schedule F. Most companies are exempted from Schedule F and there is a provision for those companies which are taxed on UK dividends (ie dealers in shares (stock)) that removes the charge from Schedule F to Schedule D.
- A controlled foreign company ("CFC") is a company controlled by a UK resident that is not itself UK resident and is subject to a lower rate of tax in the territory in which it is resident. Under certain circumstances, UK resident companies that control a CFC pay corporation tax on what the UK tax profits of that CFC would have been. However, because of a wide range of exemptions, very few companies suffer a CFC charge.
- Schedules B, C and E used to, but no longer, exist.
- Authorised unit trusts and OEICs are not liable to tax on their chargeable gains.
Schedule D is itself divided into a number of cases:
| Scope | |
|---|---|
| Case I | Profits from a UK trade |
| Case III | Interest-type income and gains/losses on loans, derivatives, financial instruments and intangibles |
| Case V | Overseas income |
| Case VI | Annual income not falling within Cases I, III and V, and other income/gains specifically taxed under Case VI |
Notes:
- Cases II and IV only apply to income tax and not corporation tax.
Relief for expenses
Direct expenses are deductible in the calculation of taxable income and taxable chargeable gains.
Companies with investment business may deduct certain indirect expenses known as "expenses of management" when calculating their taxable profits. A similar relief is available for expenses of a life assurance company taxed on the I minus E basis which relate to the company's basic life assurance and general annuity business. Donations made to charities are also deducted in calculating taxable.
Payment of tax
Most companies are required to pay tax nine months and a day after the end of an accounting period. Larger companies, however, are required to pay tax in quarterly instalments in the seventh, tenth, thirteenth and sixteenth months after a twelve-month accounting period starts. These times are modified where an accounting period lasts for less than twelve months. From 2005 onwards, the third and fourth quarterly instalments are merged for tax payable on oil and gas extraction profits, including the supplementary 10% charge on those profits, so that half the tax due on these profits is paid in the thirteenth month after the start of a twelve-month accounting period.
Rates
Initially corporation tax was charged at 40%, a figure that rose to 45% in the 1969 Budget. The rate then fell to 42.5% in the second Budget of 1970 and 40% in 1971, which is where it stayed till 1973, when a full rate of 52% was introduced, together with a smaller companies' rate of 42%. Starting in the early 1980s rates were lowered, reaching 35% and 25% by 1988. Also, in the 1980s there was briefly a higher rate of tax imposed for capital profits.
Since then there have been a series of steady falls to the current rates of 30%, 19% and 0%. Also, although the full rate of corporation tax has always been set independently from the income tax rates applicable to individuals, from April 1983 to March 1997 the small companies' rate was pegged to the basic rate of income tax. Since then, there has been no correlation between corporation and income tax rates for most companies.
In 2004 a new non-corporate distribution rate of 19% was levied. This measure ensures that all amounts distributed to non-corporates (eg individuals, trusts and personal representatives of deceased persons) suffer corporation tax of at a rate of at least 19%.
The rate of corporation tax is determined by reference to the financial year. A financial year runs from 1 April to the following 31 March. So, Financial Year FY05 started on 1 April 2005 and will end on 31 March 2006. The following applies as from 1 April 2003, and the Finance Bill 2005 proposes using them until at least 31 March 2006. The main rate of corporation tax is 30%. However, lower rates are sometimes applicable.
| Tax rates since 1 April 2003 | |
|---|---|
| GBP (£) | |
| Starting rate zero | 0 - 10,000 |
| Marginal relief | 10,001 - 50,000 |
| Small companies' rate 19% | 50,001 - 300,000 |
| Marginal relief | 300,001 - 1,500,000 |
| Main rate 30% | 1,500,001 or more |
Notes:
- The bands shown on the right hand side are divided by one plus the number of associates (usually the only associates a company has are fellow group companies, but the term is more widely defined)
- The reduced rates do not apply to close investment holding companies (companies controlled by fewer than 5 people (plus associates) or by their directors/managers, whose main activity is the holding of investments). Nor do they apply to companies in liquidation after the first 12 months.
- Authorised unit trusts and open-ended investment companies are taxed at the basic rate of income tax, which, for 2005/6 is 22%.
- Life assurance companies are taxed using the above rate on shareholder profits and 20% on policy holder profits (See also: I minus E basis)
- Companies active in the oil and gas extraction industry in the UK or on the UK continental shelf are subject to an additional 10% charge on their profits from those activities
In 2005/6 approximately 45,000 companies will pay corporation tax at the full 30% rate. These 3.4% of active companies will be responsible for 84% of all corporation tax receipts. Around 170,000 companies will pay the small companies rate of 19%, with 25,000 benefiting from marginal relief. 310,000 will be in the 0% band, with 250,000 benefiting from the lower band of marginal relief - however, 350,000 will suffer corporation tax under the non-corporate distributions provisions.
For the financial year ended 31 March 2003 the tax raised revenues of £28.2bn from 512,269 companies. Only 18,802 companies had a liability in excess of £100,000.
Relief from double taxation
There is a risk of double taxation whenever a company receives income that has already been taxed. This could be dividend income, which will have been paid out of the post-tax profits of another company and which may have suffered withholding tax. Or it could be because the company itself has suffered foreign tax, perhaps because it conducts part of its trade through an overseas permanent establishment, or because it receives other types of foreign income.
Double taxation is avoided for UK dividends by exempting them from tax for most companies: only dealers in shares suffer tax on them. Where double taxation arises because of overseas tax suffered, relief is available either in the form of expense or credit relief. Expense relief is straightforward: the overseas tax is treated as a deductible expense in the tax computation. Credit relief is given as a deduction from the UK tax liability, but is restricted to the amount of UK tax suffered on the foreign income. There is a system of onshore pooling, so that overseas tax suffered in high tax territories may be set off against taxable income arising from low tax territories.
Loss relief
Detailed and separate rules apply to how all the different types of losses may be set off within a company. A detailed explanation of these can be found in: United Kingdom corporation tax loss relief.
Group relief
The UK does not permit tax consolidation. Tax consolidation is where companies in a group are treated as though they are a single entity for tax purposes. One of the main benefits of tax consolidation is that tax losses in one entity in a group are automatically relievable against the tax profits of another. Instead, the UK permits a form of loss relief called "group relief".
Where a company has losses arising in an accounting period (other than capital losses, or losses arising under Case V or VI of Schedule D) in excess of its other taxable profits for the period, it may surrender these losses as group relief, provided there is a suitable group member with sufficient taxable profits in the same accounting period. (There are separate rules for life assurance companies and dual resident companies not covered here.)
A company may accept group relief against its own profits chargeable to corporation tax. However, a company in the oil and gas extraction industry may not accept group relief against the profits arising on its oil and gas extraction business, and a life assurance company may only accept group relief against its profits chargeable to tax at the standard shareholder rate applicable to that company.
Full group relief is permitted between companies subject to UK corporation tax that are in the same 75% group. Broadly speaking a 75% group is one where companies have a common ultimate parent, and at least 75% of the shares in each company (other than the ultimate parent) are owned by other companies in the 75% group. The companies making up a 75% group do not all need to be UK resident or subject to UK corporation tax relief. An open-ended investment company cannot form part of a group.
Consortium relief is permitted where a company subject to UK corporation tax is owned by a consortium of companies that each own at least 5% of the shares and together own at least 75% of the shares. A consortium company can only surrender or accept losses in proportion to how much of that company is owned by each consortium group.
Example computation
This is an example computation involving Example Company Ltd, which has one associate from which it receives £50,000 group relief.
| Example Company Ltd | ||
|---|---|---|
| £ | £ | |
| Schedule A (UK land) | 100,000 | |
| Schedule D | ||
| — Case I (UK trade) | 200,000 | |
| — Case I losses brought forward | (100,000) | 100,000 |
| — Case III (loan relationships, derivatives, financial instruments) | 100,000 | |
| — Case V (overseas) | 300,000 | |
| — Case VI (other annual profits) | 10,000 | |
| Chargeable gains (capital gains) | 150,000 | |
| Allowable (capital) losses brought forward | (50,000) | 100,000 |
| Less: Non-trading debits brought forward 1 | (50,000) | |
| Less: Management expense deduction 2 | (20,000) | |
| Less: Charges (donations to UK charities) | (10,000) | |
| Less: Group relief accepted | (50,000) | |
| Profits chargeable to corporation tax | 580,000 | |
| Tax @ 30% | 174,000 | |
| Less: Marginal relief 3 | (46,750) | |
| Less: Double tax relief 4 | (30,000) | |
| Tax liability for the period | 97,250 | |
Notes:
- 1 Brought forward non-trading debits can be utilised against non-trading profits, they cannot reduce the trading profits
- 2 The management expense deduction is in relation to expenses incurred on managing the company's investments
- 3 The marginal relief computation is as follows:
- Marginal relief fraction x (Upper limit/(Number of associates plus one) - Profit))
- 11/40 x (1,500,000/2 - 580,000)
- 4 The £30,000 overseas tax has been included in the taxable Schedule D Case V figure. Double tax relief is available on the lower of overseas tax suffered and UK corporation tax suffered on the overseas income.
Interaction with European law
Although there are no European Union directives (laws) dealing with direct taxes, tax laws need to comply with more general European legislation. In particular legislation should not be discriminatory, and must be consistent with EU directives on freedom of establishment and freedom of movement.
Key cases decided by the European Court of Justice that have had a direct impact on UK tax law include:
- Hoescht - where the Court found that the way the partial imputation system operated prior to its abolition in 1999 was discriminatory;
- Lankhorst-Hohorst, which was a German case, that implied that the UK's transfer pricing and thin capitalisation legislation may have been contrary to EU legislation (the 2004 Finance Act made changes to counter this threat);
Also, the case of ICI v Colmer led to the UK amending its definition of a group for group relief purposes to that outlined above. Previously the definition required that all companies and intermediate parent companies in a group to be UK resident.
There are also a number of other cases making their way, slowly, up to the European Court. Most of these are expected to be found in favour of the taxpayer. In particular:
- Marks and Spencer - where it is claimed that UK parents should be able to relieve the losses of overseas subsidiaries against the tax profits of their UK subgroup (On 7 April 2005, the Advocate-General gave an opinion supporting the claim of a UK parent to offset losses of its EU subsidiaries, where no effective loss relief was available in the EU Member States the subsidiaries were resident in);
- A group litigation order arguing that dividends received from overseas companies should be exempt from tax in the same way as dividends received from UK companies are exempted from tax;
- Claims that the UK CFC legislation is contrary to EU law.
History
Introduction of the tax
Corporation tax was introduced as from 1 April 1965 by the then Chancellor of the Exchequer James Callaghan. Before 1965 companies were liable to income tax, which is still paid by individuals and trusts, and a special company profits tax.
UK tax makes a distinction between revenue and capital. Neither term is formally defined. However, capital implies something of enduring benefit, revenue implies that it is normally ongoing expenditure. For example, expenditure by a company on acquiring a new head office will be capital; expenditure on stationery will be revenue. Some items that are capital for one company, may be revenue for another: whilst expenditure by a company on acquiring a new head office will be capital expenditure for that company, it may be a revenue receipt for a company whose business is building new office blocks.
Before 1965, revenue (income) was taxed. Most capital gains were not taxed.
In the Finance Act 1965, UK resident companies and overseas companies trading through a UK branch, which were removed from the income tax charge, and instead made liable to corporation tax; the profits tax was abolished. Corporation tax was then charged a uniform rate on all profits, but with an additional charge to income tax when profits were distributed.
In the same Finance Act, capital gains tax was introduced. Capital gains taxed introduced a charge on certain capital gains arising on assets disposed of by individuals. Companies were exempted from capital gains tax, but became liable to corporation tax on their "chargeable gains", which were calculated in the same way as individuals' capital gains were taxed.
The partial imputation system
Introduction
The basic structure of the tax then remained unchanged till 1973, when a partial imputation system was introduced. When individuals receive dividends, they are taxed on them. However, dividends are paid by companies out of post-tax profits. The word "imputation" refers to tax that was paid by a company being imputed to the individual shareholder so that the shareholder receives a dividend with some of his tax liability already being covered by the tax paid by the company.
The sytem worked as follows: When companies made distributions, they also paid advance corporation tax ("ACT"), which could be set off against the mainstream corporation tax charge, subject to certain limits (which meant that the full amount of ACT paid would not be recovered where significantly large amount of profits were distributed). Individuals and companies who received a dividend from a UK company received a tax credit representing the UK tax suffered by that company (by way of ACT). Individuals could set off the tax credit against their income tax liability.
When a company received a distribution from another UK company, ACT wasn't payable (unless the payor company elected to pay it). Also, the recipient UK company was not charged to tax on that dividend (except for dealers in shares and life assurance companies in respect of some of their profits). To take account of the fact that the payor company would have suffered tax on the payments it made, the UK company that received the dividend also received a credit on top of the dividend it received that it could use to reduce the amount of ACT it itself paid, or, in certain cases, apply to have the tax credit repaid to them by the Inland Revenue.
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Abolition
From 6 April 1999 the imputation system was replaced. ACT no longer became payable. The tax credit on dividends was reduced to 10%, but the tax credit no longer had any value for companies. However, those subject to income tax can set off the tax credit against their income tax liabilities. ACT that had already been suffered could still be set off against a company's tax liability, provided it would have been able to set it off under the old imputation system.
Taxable profits and accounting profits
Although the starting point for a taxable profits computation, except for a life assurance company, was always profits before tax per the financial statements, the rules for calculating Corporation tax rules ran pretty much in parallel with income tax rules until 1993. Also, the methodology applied to calculating the corporation tax liability did not change substantially until that date. 1993 saw the first of the statutory rules to move taxation more into line with profit reporting under generally accepted accounting practice, although the law courts were moving ever more closely to requiring trading profits to be computed using general accountancy rules before that.
The Finance Act 1993 introduced rules to make tax on exchange gains and losses mimic their treatment in a company's financial statements in most instances. The Finance Act 1994 saw similar rules for financial instruments, and in the Finance Act 1996 the treatment of most loan relationships was also brought into line with the accounting treatment. The Finance Act 1997 saw something similar with rental premiums. A year later, the Finance Act 1998 went even further, making it clear that taxable trading profits (apart from those accruing to a Lloyd's corporate name or to a life assurance company) and profits from a rental business are equal to profits calculated under generally accepted accounting practice ("GAAP") unless there is a specific statutory or case law rule to the contrary. This was followed up by the Finance Act 2004, which provided that the deduction for expenses of management available to a company with investment business is calculated by reference to figures in the financial statements.
International Financial Reporting Standards
From 2005 all companies listed in the European Union have to prepare their financial statements using the GAAP known as "International Financial Reporting Standards" ("IFRSs"), as modified by the EU. Other UK companies may choose to adopt IFRSs if they so choose. Corporation tax law is changing to accommodate this - so, in the future, IFRSs accounting profits are largely respected for corporation tax purposes. The exception is for certain financial instruments and certain other measures to prevent tax arbitrage between companies applying IFRSs and companies applying UK GAAP.
Avoidance
Tax avoidance is the legitimate mitigation of tax through tax planning techniques and/or usage of provisions in the law (in contrast, see tax evasion). There are a number of tax professionals working in the tax avoidance industry. Unlike most other countries, most UK tax professionals are accountants rather than lawyers by training, although there are many tax lawyers too. The main promoters of tax avoidance schemes therefore tend to be the large accountancy and law firms, and large financial services groups, who market tax-efficient investments.
There has never been a general anti-avoidance rule ("GAAR") to counter tax avoidance that applies to corporation tax. However, when corporation tax was introduced, it inherited an anti-avoidance rule from income tax relating to tax avoidance on transactions in securities, and since then has had various "mini-GAARs" added to it. The best known "mini-GAAR" prevents a deduction for interest when the loan to which it relates is made for an "unallowable purpose".
More recently, the Government has sought to crack down on tax avoidance more forcefully. In the Finance Act 2004 tax avoidance disclosure rules were introduced. These make promoters of certain tax avoidance schemes that are financing or employment related have to disclose the tax avoidance scheme to the Revenue. Taxpayers who use those tax avoidance schemes must also disclose which schemes they have used to the Inland Revenue when they submit their tax returns. This is the first time anyone has been obliged to alert the Revenue to tax planning techniques they are using, and the Finance Act 2005 has shown the first fruits of this, with a number of tax avoidance schemes being blocked that the Revenue otherwise would not have heard about for at least another year. More will be blocked in the Finance (No.3) Bill that will be published after the UK general election.
Need for greater revenues
Recently, the Government has sought to raise more revenues from corporation tax. In particular, the Government has targeted companies that it sees as being particularly wealthy. In 1997, when the current Government was first elected, it charged a windfall tax on recently privatised companies. Later, in 2002 it levied charges on the financial services sector by moving from taxing a company's equity and equity-based security portfolio based on movements in their market value in a period (a "mark to market" basis). Previously they had been taxed on a realisation basis, where profits (or losses) are only taxed (or relieved) when the security is sold. In 2003 it introduced a separate 10% supplementary charge on profits from oil and gas extraction businesses.
The Finance (No.3) Bill 2005 will continue this theme. There will be measures specifically relating to life assurance companies that saw Legal and General announce to the Stock Exchange that £300m had been wiped off their value, and Aviva (Norwich Union) announced that the tax changes would cost its policy holders £150m. The Finance Bill 2005 contains measures to accelerate when oil and gas extraction business have to pay tax. Instead of paying their tax in four equal instalments in the seventh, tenth, thirteenth and sixteenth month after the accounting period starts, they will be required to consolidate their third and fourth payments and pay them in the thirteenth month, giving rise to a substantial one-off cash flow advantage for the Government.
Recent developments
Corporation tax reform
There have recently been a number of proposals for corporation tax reform. So far only a few have been enacted:
- In March 2001 the Government published a technical note A Review of Small Business Taxation. The note considered simplification of corporation tax for small companies through the closer alignment of their profits for tax purposes with those reported in their accounts.
- In July 2001 the Government published a consultation document Large Business Taxation: the Government's strategy and corporate tax reforms. It set out the Government's strategy for modernising corporate taxes and proposals for relief for capital gains on substantial shareholdings held by companies.
- In August 2002 Reform of corporation tax - A consultation document was published, outlining initial proposals for the abolition of the Schedular system. This was followed up in August 2003 by Corporation tax reform - A consultation document, which further discussed the possible abolition of the Schedular system, and also whether the capital allowances (tax depreciation) system should be abolished. It also made proposals that were ultimately enacted in the Finance Act 2004. The first two of these listed below were in response to threats to the UK tax base arising from recent ECJ judgments. The changes were to:
- introduce transfer pricing rules for UK to UK transactions (transfer pricing rules require certain transactions to be deemed to have taken place at arm's length prices for tax purposes when they did not in fact take place at arm's length prices)
- merge thin capitalisation rules with the transfer pricing rules. Thin capitalisation rules limit the amount a company can claim as a tax deduction on interest when it receives loans at non-commercial rates (eg from connected parties),
- extend the deduction for management expenses to all companies with an investment business (previously a company had to be wholly or mainly engaged in an investment business to qualify)
- In December 2004 Corporation tax reform - a technical note was published. It outlined that the Government had decided to abolish the Schedular system, replacing the numerous schedules and cases with two pools: a trading and letting pool; and an everything else pool. The Government had decided that capital allowances would remain, though there would be some reforms, mostly affecting the leasing industry.
Recent enactments
So far, the following main reforms have been enacted:
- Relief from tax on chargeable gains on disposals of substantial shareholdings in trading companies and groups (enacted by the Finance Act 2002)
- Introduction of UK to UK transfer pricing rules, coupled with the merging of the thin capitalisation rules with the transfer pricing rules (enacted by the Finance Act 2004)
- Extension of management expenses rules so that companies do not need to be investment companies to receive them, coupled with a specific rule preventing capital items being deductible as management expenses (enacted by the Finance Act 2004)
See also
References
- Inland Revenue Company Taxation Manual (http://www.inlandrevenue.gov.uk/manuals/ct123manual/index.htm)
- Income and Corporation Taxes Act 1988 (link is to the Act as originally enacted) (http://www.legislation.hmso.gov.uk/acts/acts1988/Ukpga_19880001_en_1.htm)
- Taxation of Chargeable Gains Act 1992 (link is to the Act as originally enacted) (http://www.legislation.hmso.gov.uk/acts/acts1992/Ukpga_19920012_en_1.htm)
- Capital Allowances Act 2001 (link is to the Act as originalled enacted) (http://www.legislation.hmso.gov.uk/acts/acts2001/20010002.htm)
- Finance Acts 1965-2004 (the Finance Acts from 1988 onwards, as originally enacted, are available under "Public Acts" on this link (http://www.legislation.hmso.gov.uk/acts.htm). Note: earlier Finance Acts were consolidated into the Income and Corporation Taxes Act 1988, the Taxation of Chargeable Gains Act and the Capital Allowances Act 2001
- The Taxes Acts 2002 (ie all legislation extant in 2002) are available here (http://www.inlandrevenue.gov.uk/taxes_act_2002/index.htm)
- The Inland Revenue website section on Corporation Tax (http://www.inlandrevenue.gov.uk/businesses/tmacorporate-tax.shtml)
- Reform of corporation tax - A consultation document (August 2002) published by HM Treasury and the Inland Revenue (pdf) (http://www.inlandrevenue.gov.uk/consult_new/taxreform_final.pdf)
- Corporation tax reform - A consultation document (August 2003) published by HM Treasury and the Inland Revenue (pdf) (http://www.inlandrevenue.gov.uk/consult_new/corp-tax-reform.pdf)
- Corporation tax reform - A technical note (December 2004) published by HM Treasury and the Inland Revenue (pdf) (http://www.inlandrevenue.gov.uk/pbr2004/sup_ct-reform-tech-note.pdf)
- Key economic events 1955-1979 by Biz/ed (http://www.bized.ac.uk/dataserv/chron/kf5579.htm#1972)
- Rate of Corporation tax by the Inland Revenue (pdf) (http://www.inlandrevenue.gov.uk/stats/corporate_tax/table_a6_december04.pdf)
- Summary of Hoescht by lawreports.co.uk (http://www.lawreports.co.uk/ecjmar0.4.htm)
- Summary of Lankhorst-Hohorst by lawreports.co.uk (http://www.lawreports.co.uk/ecjdecc0.1.htm)
- The Lankhorst-Hohorst judgment (http://curia.eu.int/jurisp/cgi-bin/gettext.pl?lang=en&num=79978787C19000324&doc=T&ouvert=T&seance=ARRET&where=())
- Explanatory Notes to Clauses 15 to 21 of the Finance Bill 2005 (pdf) (http://www.hm-treasury.gov.uk/media/CFE/F9/finbill05_noteonclause_015-021.pdf)
- Finance Bill 2005
- Legal and General press release - Changes to Life Fund Taxation (http://investor.legalandgeneral.com/news/20041203-149789.cfm?ReleaseID=149789)
- Finance Act 2005
- Press Release No 29/05 - Advocate General's Opinion in Case 446/03 - Marks & Spencer plc v David Halsey (HM Inspector of Taxes) release by the Court of Justice of the European Communities on 7 April 2005
- Opinion of Advocate General - Case C-446/03 - Marks & Spencer plc v David Halsey (HM Inspector of Taxes), released by the Court of Justice of the European Communities on 7 April 2005