Corporation tax: contributions (Notes CT220)

1. Insight

These notes will help you understand your company’s corporate tax assessment and tell you what to do if you disagree with any of the figures given.

If you need more information, please contact your HMRC office indicating the reference and the evaluation number appearing at the top of the evaluation.

2. What your corporation tax notice shows

The assessment shows your company’s corporate tax position for the accounting period (PA). This is usually based on information contained in your company’s corporate income tax return or subsequent changes. We use estimated numbers if you haven’t sent us enough information to make an accurate assessment. In this case, there is a letter E in front of the figure.

3. What to do with your business valuation

You must decide if you agree with the assessment. If the company has a professional advisor or agent, you should make sure they see the appraisal immediately. We will have sent them a copy if you have authorized us to do so.

3.1 If you think the assessment is correct

If there is no tax to pay, just keep the assessment in case you need to refer to it later.

If there are taxes to pay, we attach a payslip to the assessment indicating the amount. The notes on the back of the payslip tell you how to make your payment.

Interest is charged on all late payments.

3.2 If you think the rating is wrong

If you think the assessment is wrong, you should appeal immediately. For more information on this, see the Calls section.

Even if you appeal, you must pay the tax unless you also request a payment deferral. For more information on this, see the Calls section.

4. Complaints

The assessment should reflect any claims your business has ever made.

4.1 Capital allocations

Your company may have requested allowances for certain capital expenditures relating to:

  • machinery or factory
  • the construction of industrial buildings, including hotels and commercial buildings in business areas
  • agricultural buildings
  • the operation of a mine, an oil well (and others)
  • purchase of patent rights
  • Scientific Research

The claim had to be made in a corporation tax return or amended return no later than the date:

  • 2 years from the end of the company PA
  • when the assessment (or determination of business losses or group relief) becomes final, provided it is no later than 6 years from the end of the company’s business PA

Your company could modify or withdraw a request in an amended declaration within the same deadlines.

4.2 Commercial losses

Your company may have alleged that an operating loss in the PA is used to reduce the profits of this PA or PAs that fell entirely in the previous year. For PAs that ended before July 2, 1997, or when the business ceased permanently, business losses could be carried forward for 3 years. The claim had to be made within 2 years of the end of the PA in which the loss was incurred.

4.3 Group relief

Subject to certain conditions, your business may have claimed relief, business losses and certain other items eligible for relief from another business in the same group for the same PA. Similar relief could have been claimed if your company is a member of a consortium. The request had to be made in a corporate income tax return or amended return by the date:

  • 2 years from the end of the activity of the applicant company PA
  • when the valuation has become final, provided that it is no later than 6 years from the end of the activity of the company PA

The company may amend or withdraw a claim in an amended statement within the same timeframe.

4.4 Advance corporate tax

Where your business has paid (and not been refunded) the withholding tax on corporations (LAW), this LAW is deducted from the corporation tax levied on the profits of your company for this PA.

The quantity of LAW that can be compensated is limited to the amount of LAW that would have been payable as a distribution made at the end of PA of an amount which, together with the LAW with respect to it, is equal to the profits imputed to the Corporation Tax for PA.

When the company has a surplus LAWhe may have claimed to charge this excess against the corporation tax charged for the APs up to 6 years earlier.

The claim had to be made within 2 years of the end of the PA in which the surplus appeared.

5. What to do next

5.1 Payment of tax

Corporation tax is due 9 months and one day after the end of PA. Interest is charged on all payments made after this due date. If you have not paid the unpaid tax, you must do so without delay. The notes on the back of the appraisal tell you how to make your payment.

5.2 Interest charges on late payments

We charge interest if you don’t pay your business tax on time. Interest is charged from the due date until the date you pay.

The corporation tax due date is always 9 months and one day after the end of the accounting period indicated in the assessment.

If you have paid more tax than is due according to your business assessment, we will normally automatically refund you the overpaid tax.

We will pay interest on any redemption from the date of payment (or the due date if later) until the date of redemption.

If you have already paid interest on some of the tax that is being refunded, we will also refund that interest automatically.

Ask your accounting office if you want to know more about the interest we charge on late payments or the interest we pay on refunds.

6. calls

If you do not agree with the amount of the contribution, you or your company adviser can appeal it by writing to the officer whose address appears on the notice. For any appeal, we will need to know:

  • the reference and the accounting period printed at the top of the balance sheet
  • why do you think the numbers are wrong
  • the correct figures for any amounts you think should be changed

The appeal must be filed within 30 days of the date the assessment was issued. If you have not already done so, you must provide your company’s completed corporate income tax return, along with the appropriate accounts and calculations.

Penalties are charged when a return is delivered late, even if there is no tax to pay.

If you appeal and think the amount of tax charged is excessive, you can also request a deferral of the deductible payment.

Tell us:

  • why you think the tax charged is excessive and by how much
  • the amount you propose to pay before your appeal is settled

We expect you to make a fair estimate of these amounts. We will let you know if we accept your application.

Any tax that has not been deferred must be paid immediately. Any amount deferred but deemed due will bear interest from the normal due date(s).

Once you send us the appeal, we may have further discussions with you to try to resolve the dispute. Most conflicts are resolved this way. You can also ask us to review the case, or we can offer you a review.

You can request that your appeal be heard by an independent tribunal. If you have accepted our exam offer, you can only do so if the exam is complete.

If you have requested a review and the decision maker has written to you with our views on the matter, you can only request that the appeal be heard by the court if the review is complete.

If you disagree with the review officer’s decision, you can ask to have your appeal heard by the court.

You must do so within 30 days of our conclusion of the review letter (or the letter advising you that the review is deemed to confirm the original decision). To do this, write to the court or fill out the court appeal form.

You can only request that your appeal be considered by the court if you have already sent an appeal to HMRC.

Luisa D. Fuller