Taxation (International and Other Provisions) Bill

House of Commons

Session 2009 - 10
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Other Bills before Parliament

Taxation (International and Other Provisions) Bill

Taxation (International and Other Provisions) Bill
Part 7 — Tax treatment of financing costs and income
Chapter 3 — Disallowance of deductions
155

(b)
if such an appointment does not have effect in relation to the relevant
period of account, by the appropriate person in relation to each
company to which this Chapter applies.
(3)
The statement must show—
(a)
the tested expense amount,
5
(b)
the available amount, and
(c)
the total disallowed amount.
(4)
The statement must—
(a)
list one or more companies to which this Chapter applies, and
(b)
in relation to each listed company, specify one or more financing
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expense amounts for the relevant period of account that are to be
disallowed, and give the relevant details in relation to each such
amount.
(5)
For this purpose “the relevant details”, in relation to a financing expense
amount are—
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(a)
which of conditions A, B and C in section 313 is met in relation to the
amount, and
(b)
the relevant accounting period of the company in which the amount
would, apart from this Part, be brought into account for the purposes
of corporation tax.
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(6)
The sum of the amounts specified under subsection (4)(b) must equal the total
disallowed amount.
(7)
In this section “the appropriate person”, in relation to a company, means—
(a)
the proper officer of the company, or
(b)
such other person as may for the time being have the express, implied
25
or apparent authority of the company to act on its behalf for the
purposes of this Part.
(8)
Subsections (3) and (4) of section 108 of TMA 1970 (responsibility of company
officers: meaning of “proper officer”) apply for the purposes of this section as
they apply for the purposes of that section.
30
(9)
For the meaning of “financing expense amount”, see Chapter 7.
281
Statement of allocated disallowances: effect
A financing expense amount of a company to which this Chapter applies that
is specified in a statement of allocated disallowances under section 280(4)(b) is
not to be brought into account by the company for the purposes of corporation
35
tax.
282
Company tax returns
(1)
This section applies if—
(a)
a company to which this Chapter applies has delivered a company tax
return for a relevant accounting period, and
40
(b)
as a result of the submission of a revised statement of allocated
disallowances under section 279—
(i)
there is a change in the amount of profits on which corporation
tax is chargeable for the period, or

Taxation (International and Other Provisions) Bill
Part 7 — Tax treatment of financing costs and income
Chapter 3 — Disallowance of deductions
156

(ii)
any other information contained in the return is incorrect.
(2)
The company is treated as having amended its company tax return for the
accounting period so as to reflect the change mentioned in subsection (1)(b)(i)
or to correct the information mentioned in subsection (1)(b)(ii).
283
Power to make regulations about statement of allocated disallowances
5
The Commissioners may by regulations make further provision about a
statement of allocated disallowances including, in particular, provision—
(a)
about the form of a statement and the manner in which it is to be
submitted,
(b)
requiring a person to give information to HMRC in connection with a
10
statement,
(c)
as to circumstances in which a statement that is not received by the time
specified in section 278(2) or 279(2) is to be treated as if it were so
received, and
(d)
as to circumstances in which a statement that does not comply with the
15
requirements of section 280 is to be treated as if it did so comply.
284
Failure of reporting body to submit statement of allocated disallowances
(1)
This section applies if no statement of allocated disallowances is submitted
under section 278 that complies with the requirements of section 280.
(2)
Each company to which this Chapter applies that has a net financing deduction
20
for the relevant period of account that is greater than nil must reduce the
amounts that it brings into account in relevant accounting periods in respect of
financing expense amounts.
(3)
The total of the reductions required to be made by a company because of
subsection (2) is—

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where—
NFD is the net financing deduction of the company for the relevant period
of account (see section 329(2)),
TEA is the tested expense amount for the relevant period of account (see
section 329(1)), and
30
TDA is the total disallowed amount (see section 274(2)).
(4)
The particular financing expense amounts that must be reduced, and the
amounts by which they must be reduced, must be determined in accordance
with regulations made by the Commissioners.
(5)
Regulations under this section may, in particular, include any of the
35
following—
(a)
provision conferring a discretion on a company required to make
reductions under this section as to the particular financing expense
amounts that are to be reduced,
(b)
provision requiring a company required to make reductions under this
40
section to notify another relevant group company of the particular
reductions made, and

Taxation (International and Other Provisions) Bill
Part 7 — Tax treatment of financing costs and income
Chapter 4 — Exemption of financing income
157

(c)
provision as to the times by which such notices must be sent and as to
information that must accompany such notices.
285
Powers to make regulations in relation to reductions under section 284
(1)
The Commissioners may by regulations make provision for the purpose of
securing that a company required under section 284 to reduce the amounts that
5
it brings into account in respect of financing expense amounts for the relevant
period of account (“a company required to make default reductions”) has
sufficient information to determine their amount.
(2)
Provision that may be made in regulations under subsection (1) includes
provision requiring one or more members of the worldwide group to send
10
specified information to a company required to make default reductions.
(3)
The Commissioners may by regulations make provision about cases in which
(whether as a result of non-compliance with regulations made under
subsection (1) or otherwise) a company required to make default reductions
does not possess specified information.
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(4)
Provision that may be made in regulations under subsection (3) includes
provision as to assumptions that may or must be made in determining the
amount of a reduction under section 284 of a financing expense amount.
(5)
The Commissioners may by regulations make provision for determining a time
later than that determined under paragraph 15(4) of Schedule 18 to FA 1998
20
(amendment of return by company) before which a company required to make
default reductions may amend its company tax return so as to reflect a
reduction under section 284.
(6)
In this section “specified” means specified in regulations under this section.
Chapter 4
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Exemption of financing income
286
Application of Chapter and meaning of “total disallowed amount”
(1)
This Chapter applies if, for a period of account of the worldwide group to
which this Part applies (“the relevant period of account”)—
(a)
the tested expense amount (see Chapter 8), exceeds
30
(b)
the available amount (see Chapter 9).
(2)
In this Chapter the “total disallowed amount” means the difference between
the amounts mentioned in paragraphs (a) and (b) of subsection (1).
287
Meaning of “company to which this Chapter applies”
References in this Chapter to a company to which this Chapter applies are to a
35
company that is a UK group company at any time during the relevant period
of account.

Taxation (International and Other Provisions) Bill
Part 7 — Tax treatment of financing costs and income
Chapter 4 — Exemption of financing income
158

288
Appointment of authorised company for relevant period of account
(1)
The companies to which this Chapter applies may appoint one of their number
to exercise functions conferred under this Chapter on the reporting body in
relation to the relevant period of account.
(2)
An appointment under this section is of no effect unless it is signed on behalf
5
of each company to which this Chapter applies by the appropriate person.
(3)
The Commissioners may by regulations make further provision about an
appointment under this section including, in particular, provision—
(a)
about the form and manner in which an appointment may be made or
revoked,
10
(b)
requiring a person to notify HMRC of the making or revocation of an
appointment and about the form and manner of such notification,
(c)
requiring a person to give information to HMRC in connection with the
making or revocation of an appointment,
(d)
imposing time limits in relation to making or revoking an appointment,
15
(e)
that an appointment or its revocation is of no effect, or ceases to have
effect, if time limits or other requirements under the regulations are not
met, and
(f)
about cases where a company does not meet condition A in section 345,
or is not a member of the worldwide group, at all times during the
20
relevant period of account.
(4)
In this section “the appropriate person”, in relation to a company, means—
(a)
the proper officer of the company, or
(b)
such other person as may for the time being have the express, implied
or apparent authority of the company to act on its behalf for the
25
purposes of this Part.
(5)
Subsections (3) and (4) of section 108 of TMA 1970 (responsibility of company
officers: meaning of “proper officer”) apply for the purposes of this section as
they apply for the purposes of that section.
289
Meaning of “the reporting body”
30
In this Chapter “the reporting body” means—
(a)
if an appointment under section 288 has effect in relation to the relevant
period of account, the company appointed under that section, and
(b)
if such an appointment does not have effect in relation to the relevant
period of account, the companies to which this Chapter applies, acting
35
jointly.
290
Statement of allocated exemptions: submission
(1)
The reporting body must submit a statement (a “statement of allocated
exemptions”) in relation to the relevant period of account to HMRC.
(2)
A statement submitted under this section must be received by HMRC within
40
12 months of the end of the relevant period of account.
(3)
A statement submitted under this section must comply with the requirements
of section 292.