xmlns:atom="http://www.w3.org/2005/Atom" xmlns:atom="http://www.w3.org/2005/Atom"

SCHEDULES

SCHEDULE 18U.K. Company tax returns, assessments and related matters

Modifications etc. (not altering text)

C1Sch. 18 restricted (31.7.1998) by 1988 c. 1, s. 754B(10) (as inserted (31.7.1998 with effect as mentioned in Sch. 17 para. 37 of 1998 c. 36) by 1998 c. 36, s. 113, Sch. 17 para. 11)

C3Sch. 18 applied (20.7.2005) by Finance (No. 2) Act 2005 (c. 22), s. 61

C5Sch. 18 excluded (17.7.2013) by Finance Act 2013 (c. 29), s. 210(6)(b)

C6Sch. 18: power to amend conferred (12.2.2019) by Finance Act 2019 (c. 1), s. 87(5)(a)(6)

C7Sch. 18 applied (with modifications) (22.7.2020) by Finance Act 2020 (c. 14), Sch. 16 para. 11(4) (with Sch. 16 para. 11(5))

C8Sch. 18 applied (with modifications) (11.7.2023) by Finance (No. 2) Act 2023 (c. 30), s. 303(7)(8) (with s. 303(6))

Part VU.K. Revenue determinations and assessments

Determination of tax payable if no return delivered in response to noticeU.K.

36(1)If no return is delivered in response to a notice requiring a company tax return, [F1an officer of Revenue and Customs] may determine to the best of [F2his] information and belief the amount of tax payable by the company.U.K.

(2)The power to make a determination under this paragraph becomes exercisable if no return is delivered on or before the following date—

(a)if the filing date for any return required by the notice can be ascertained, that date;

(b)if no such date can be ascertained, the later of—

(i)18 months from the end of the period specified in the notice, or

(ii)three months from the day on which the notice was served.

(3)The accounting period or periods for which a determination may be made are—

(a)if there is only one accounting period ending in or at the end of the period specified in the notice, that period;

(b)if there is more than one accounting period ending in or at the end of the period specified in the notice, each of those periods;

(c)if [F1an officer of Revenue and Customs] [F2has] insufficient information to identify the accounting periods of the company, such period or periods ending in or at the end of the period specified in the notice as [F2he] may determine.

(4)Notice of a determination under this paragraph must be served on the company, stating the date on which the determination is issued.

(5)No determination under this paragraph may be made more than [F33 years] after the day on which the power becomes exercisable.

(6)If the company shows—

(a)that there is no accounting period of the company ending in or at the end of the period specified in the notice, or

(b)that it has delivered a return for the accounting period, or each accounting period, ending in or at the end of the period specified in the notice, or

(c)that no return is yet due for any such period,

any determination under this paragraph is of no effect.

Textual Amendments

F3Words in Sch. 18 para. 36(5) substituted (1.4.2010) by Finance Act 2008 (c. 9), s. 118(2), Sch. 39 para. 38; S.I. 2009/403, art. 2(2) (with art. 10)

Modifications etc. (not altering text)

C9Sch. 18 para. 36 applied (with modifications) (with effect in accordance with reg. 1(2) of the amending S.I.) by The Lloyds Underwriters (Tax) Regulations 2005 (S.I. 2005/3338), regs. 1(1), 6

Determination of tax payable if notice complied with in partU.K.

37(1)If a notice requiring a company tax return is served on a company and—U.K.

(a)a return is delivered for an accounting period ending in or at the end of the period specified in the notice, but

(b)there is another period so ending (the “outstanding period") which appears to [F1an officer of Revenue and Customs] is or may be an accounting period,

[F1an officer of Revenue and Customs] may determine to the best of [F2his] information and belief the amount of corporation tax payable by the company for the outstanding period.

(2)The power to make a determination under this paragraph becomes exercisable—

(a)if the filing date for the outstanding period can be ascertained and no return is delivered on or before that date;

(b)if no such date can be ascertained and no return for that period is delivered by the later of—

(i)30 months from the end of the period specified in the notice, or

(ii)three months from the day on which the notice was served.

(3)Notice of a determination under this paragraph must be served on the company, stating the date on which the determination is issued.

(4)No determination under this paragraph may be made more than [F43 years] after the day on which the power first became exercisable.

(5)If the company shows—

(a)that the outstanding period is not an accounting period, or

(b)that it has delivered a return for that period,

any determination under this paragraph is of no effect.

Textual Amendments

F4Words in Sch. 18 para. 37(4) substituted (1.4.2010) by Finance Act 2008 (c. 9), s. 118(2), Sch. 39 para. 39; S.I. 2009/403, art. 2(2) (with art. 10)

Extent of power to make determinationU.K.

38(1)The power to make a determination under paragraph 36 or 37 includes power to determine—U.K.

(a)any of the amounts mentioned in paragraph 8(1) (calculation of amount of tax payable), and

(b)any amount forming part of the calculation of any of those amounts.

(2)Notice of a determination under either of those paragraphs may be accompanied by notice of any determination by [F1an officer of Revenue and Customs] relating to the dates on which amounts of tax become due and payable under section 59D or 59E of the M1Taxes Management Act 1970.

Textual Amendments

Marginal Citations

Determination to have effect as self-assessmentU.K.

39(1)A determination under paragraph 36 or 37 has effect for enforcement purposes as if it were a self-assessment by the company.U.K.

(2)In sub-paragraph (1) “for enforcement purposes” means for the purposes of —

(a)the following Parts of the M2Taxes Management Act 1970—

Part VA (payment),

Part VI (collection and recovery),

Part IX (interest on overdue tax), and

Part XI (miscellaneous and supplementary provisions);

(b)the provisions of this Schedule imposing tax-related penalties; and

(c) the provisions of the Corporation Tax Acts enabling unpaid tax assessed on a company to be assessed on other persons.

(3) For those purposes the period for which the determination is made shall be treated as an accounting period of the company, even though—

(a) in the case of a determination under paragraph 36, [F1an officer of Revenue and Customs] [F2has] insufficient information to determine the accounting periods of the company and [F2exercises his] power under sub-paragraph (3)(c) of that paragraph, or

(b) in the case of a determination under paragraph 37, [F1an officer of Revenue and Customs] [F2has] insufficient information to determine whether the outstanding period is an accounting period.

Textual Amendments

Marginal Citations

Determination superseded by actual self-assessmentU.K.

40(1)If after a determination has been made under paragraph 36—U.K.

(a)the company delivers a company tax return for a period ending in or at the end of the period specified in the notice requiring a company tax return, and

(b)the period is, or is treated in the return as, an accounting period,

the self-assessment included in that return supersedes the determination or, if there is more than one, the determination for the period which is, or most closely approximates to, the period for which the return is made.

(2)If after a determination has been made under paragraph 37—

(a)the company delivers a further company tax return for a period ending in or at the end of the period specified in the notice requiring a company tax return, and

(b)the period is, or is treated in the return as, an accounting period,

the self-assessment included in that return supersedes the determination.

(3)Sub-paragraphs (1) and (2) do not apply to a return made—

(a)more than [F53 years] after the day on which the power to make the determination first became exercisable (see paragraph 36(2) or 37(2)), or

(b)more than twelve months after the date of the determination,

whichever is the later.

(4)Where—

(a)[F6proceedings have been begun] for the recovery of any tax charged by a determination under paragraph 36 or 37, and

(b)before the proceedings are concluded the determination is superseded by a self-assessment,

the proceedings may be continued as if they were proceedings for the recovery of so much of the tax charged by the self-assessment as is due and payable and has not been paid.

[F7(5)Where—

(a)action is being taken under Part 1 of Schedule 8 to the Finance (No. 2) Act 2015 (enforcement of deduction from accounts) for the recovery of an amount (“the original amount”) of any tax charged by a determination under paragraph 36 or 37, and

(b)before that action is concluded, the determination is superseded by a self-assessment,

that action may be continued as if it were action for the purposes of the recovery of so much of the tax charged by the self-assessment as is due and payable, has not been paid and does not exceed the original amount.]

Textual Amendments

F5Words in Sch. 18 para. 40(3) substituted (1.4.2010) by Finance Act 2008 (c. 9), s. 118(2), Sch. 39 para. 40; S.I. 2009/403, art. 2(2) (with art. 10)

F6Words in Sch. 18 para. 40(4) substituted (11.5.2001 with application as mentioned in Sch. 29 para 17(3) of the amending Act) by 2001 c. 9, s. 88, Sch. 29 para. 17(2)

F7Sch. 18 para. 40(5) inserted (18.11.2015) by Finance (No. 2) Act 2015 (c. 33), Sch. 8 para. 40

Modifications etc. (not altering text)

C10Sch. 18 para. 40 applied (with modifications) (with effect in accordance with reg. 1(2) of the amending S.I.) by The Lloyds Underwriters (Tax) Regulations 2005 (S.I. 2005/3338), regs. 1(1), 6

Assessment where loss of tax discovered or determination of amount discovered to be incorrectU.K.

41(1)If [F1an officer of Revenue and Customs] [F2discovers] as regards an accounting period of a company that—U.K.

(a)an amount which ought to have been assessed to tax has not been assessed, or

(b)an assessment to tax is or has become insufficient, or

(c)relief has been given which is or has become excessive,

[F2he] may make an assessment (a “discovery assessment") in the amount or further amount which ought in [F2his] opinion to be charged in order to make good to the Crown the loss of tax.

(2)If [F1an officer of Revenue and Customs] [F2discovers] that a company tax return delivered by a company for an accounting period incorrectly states—

(a)an amount that affects, or may affect, the tax payable by that company for another accounting period, or

(b)an amount that affects, or may affect, the tax liability of another company,

[F2he] may make a determination (a “discovery determination") of the amount which in [F2his] opinion ought to have been stated in the return.

Textual Amendments

Modifications etc. (not altering text)

C11Sch. 18 para. 41(2)-44 applied (with modifications) (with effect in accordance with reg. 1(2) of the amending S.I.) by The Lloyds Underwriters (Tax) Regulations 2005 (S.I. 2005/3338), regs. 1(1), 7

Restrictions on power to make discovery assessment or determinationU.K.

42(1)The power to make—U.K.

(a)a discovery assessment for an accounting period for which the company has delivered a company tax return, or

(b)a discovery determination,

is only exercisable in the circumstances specified in paragraph 43 or 44 and subject to paragraph 45 below.

(2)Those restrictions do not apply to an assessment or determination which only gives effect to a discovery determination duly made with respect to an amount stated in another company’s company tax return.

[F8(2A)Those restrictions, other than the restriction in paragraph 45, do not apply so far as regards any income or chargeable gains of the company in relation to which the company has been given, [F9a notice within sub-paragraph (4) after any enquiries have been completed into the return (so far as relating to the matters to which the notice relates)].]

(3)Any objection to a discovery assessment or determination on the ground that those paragraphs have not been complied with can only be made on an appeal against the assessment or determination.

[F10(4)A notice is within this sub-paragraph if it is—

(a)a notice under section 184G or 184H of the Taxation of Chargeable Gains Act 1992 (avoidance involving capital losses), [F11or]

(b)a notice under section 81(2) of TIOPA 2010 (schemes and arrangements designed to increase relief), F12...

F12(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ]

Textual Amendments

F8Sch. 18 para. 42(2A) inserted (with effect in accordance with s. 88(5) of the amending Act) by Finance Act 2005 (c. 7), s. 88(4)

F9Words in Sch. 18 para. 42(2A) substituted (with effect in accordance with Sch. 15 para. 44 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 15 para. 31

F10Sch. 18 para. 42(4) inserted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 8 para. 321(5) (with Sch. 9 paras. 1-9, 22)

F11Word in Sch. 18 para. 42(4)(a) inserted (with effect in accordance with Sch. 10 para. 22(a) of the amending Act) by Finance Act 2016 (c. 24), Sch. 10 para. 4(a)

F12Sch. 18 para. 42(4)(c) and preceding word omitted (with effect in accordance with Sch. 10 para. 22(a) of the amending Act) by virtue of Finance Act 2016 (c. 24), Sch. 10 para. 4(b)

Modifications etc. (not altering text)

C11Sch. 18 para. 41(2)-44 applied (with modifications) (with effect in accordance with reg. 1(2) of the amending S.I.) by The Lloyds Underwriters (Tax) Regulations 2005 (S.I. 2005/3338), regs. 1(1), 7

[F13Loss of tax brought about carelessly or deliberately]U.K.

Textual Amendments

F13Sch. 18 para. 43 cross-heading substituted (1.4.2010) by Finance Act 2008 (c. 9), s. 118(2), Sch. 39 para. 41(3); S.I. 2009/403, art. 2(2) (with art. 10)

43U.K.A discovery assessment for an accounting period for which the company has delivered a company tax return, or a discovery determination, may be made if the situation mentioned in paragraph 41(1) or (2) [F14was brought about carelessly or deliberately by]—

(a)the company, or

(b)a person acting on behalf of the company, or

(c)a person who was a partner of the company at the relevant time.

Textual Amendments

F14Words in Sch. 18 para. 43 substituted (1.4.2010) by Finance Act 2008 (c. 9), s. 118(2), Sch. 39 para. 41(2); S.I. 2009/403, art. 2(2) (with art. 10)

Modifications etc. (not altering text)

C11Sch. 18 para. 41(2)-44 applied (with modifications) (with effect in accordance with reg. 1(2) of the amending S.I.) by The Lloyds Underwriters (Tax) Regulations 2005 (S.I. 2005/3338), regs. 1(1), 7

Situation not disclosed by return or related documents etc.U.K.

44(1)A discovery assessment for an accounting period for which the company has delivered a company tax return, or a discovery determination, may be made if at the time when [F1an officer of Revenue and Customs]—U.K.

(a)ceased to be entitled to give a notice of enquiry into the return, or

[F15(b)in a case where a notice of enquiry into the return was given—

(i)issued a partial closure notice as regards a matter to which the situation mentioned in paragraph 41(1) or (2) relates, or

(ii)if no such partial closure notice was issued, issued a final closure notice,]

[F2he] could not have been reasonably expected, on the basis of the information made available to [F2him] before that time, to be aware of the situation mentioned in paragraph 41(1) or (2).

(2)For this purpose information is regarded as made available to [F1an officer of Revenue and Customs] if—

(a)it is contained in a relevant return by the company or in documents accompanying any such return, or

(b)it is contained in a relevant claim made by the company or in any accounts, statements or documents accompanying any such claim, or

(c)it is contained in any documents, accounts or information produced or provided by the company to [F1an officer of Revenue and Customs] for the purposes of an enquiry into any such return or claim, or

(d)it is information the existence of which, and the relevance of which as regards the situation mentioned in paragraph 41(1) or (2)—

(i)could reasonably be expected to be inferred by [F1an officer of Revenue and Customs] from information falling within paragraphs (a) to (c) above, or

(ii)are notified in writing to [F1an officer of Revenue and Customs] by the company or a person acting on its behalf.

(3)In sub-paragraph (2)—

Textual Amendments

F15Sch. 18 para. 44(1)(b) substituted (with effect in accordance with Sch. 15 para. 44 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 15 para. 32

F16Words in Sch. 18 para. 44(3) inserted (with effect in accordance with Sch. 15 para. 10 of the amending Act) by Finance Act 2007 (c. 11), Sch. 15 para. 9

Modifications etc. (not altering text)

C11Sch. 18 para. 41(2)-44 applied (with modifications) (with effect in accordance with reg. 1(2) of the amending S.I.) by The Lloyds Underwriters (Tax) Regulations 2005 (S.I. 2005/3338), regs. 1(1), 7

C12Sch. 18 para. 44(2)(3) applied by Taxation of Chargeable Gains Act 1992 (c. 12), s. 184I(6) (as inserted by Finance Act 2006 (c. 25), s. 71(1)(4))

C13Sch. 18 para. 44(2)(3) applied (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), ss. 256(5), 381(1) (with Sch. 9 paras. 1-9, 22)

Return made in accordance with prevailing practiceU.K.

45U.K.No discovery assessment for an accounting period for which the company has delivered a company tax return, or discovery determination, may be made if—

(a)the situation mentioned in paragraph 41(1) or (2) is attributable to a mistake in the return as to the basis on which the company’s liability ought to have been computed, and

(b)the return was in fact made on the basis or in accordance with the practice generally prevailing at the time when it was made.

General time limits for assessmentsU.K.

46(1)Subject to any provision of the Taxes Acts allowing a longer period in any particular class of case no assessment may be made more than [F174 years] after the end of the accounting period to which it relates.U.K.

[F18(2)An assessment in a case involving a loss of tax brought about carelessly by the company (or a related person) may be made at any time not more than 6 years after the end of the accounting period to which it relates (subject to sub-paragraph (2A) and to any other provision of the Taxes Acts allowing a longer period).

(2A)An assessment in a case involving a loss of tax—

(a)brought about deliberately by the company (or a related person),

(b)attributable to a failure by the company to comply with an obligation under paragraph 2, F19...

(c)attributable to arrangements in respect of which the company has failed to comply with an obligation under section 309, 310 or 313 of the Finance Act 2004 (obligation of parties to tax avoidance schemes to provide information to Her Majesty's Revenue and Customs), [F20or

(d)attributable to arrangements which were expected to give rise to a tax advantage in respect of which the company was under an obligation to notify the Commissioners for Her Majesty's Revenue and Customs under section 253 of the Finance Act 2014 (duty to notify Commissioners of promoter reference number) but failed to do so,]

may be made at any time not more than 20 years after the end of the accounting period to which it relates (subject to any provision of the Taxes Acts allowing a longer period).

(2B)In this paragraph “related person”, in relation to a company, means—

(a)a person acting on behalf of the company, or

(b)a person who was a partner of the company at the relevant time.]

(3)Any objection to the making of an assessment on the ground that the time limit for making it has expired can only be made on an appeal against the assessment.

Textual Amendments

F17Words in Sch. 18 para. 46(1) substituted (1.4.2010) by Finance Act 2008 (c. 9), s. 118(2), Sch. 39 para. 42(2); S.I. 2009/403, art. 2(2) (with art. 10)

F18Sch. 18 para. 46(2)-(2B) substituted for Sch. 18 para. 46(2) (1.4.2010) by Finance Act 2008 (c. 9), s. 118(2), Sch. 39 para. 42(3); S.I. 2009/403, art. 2(2) (with arts. 8, 10)

F19Word in Sch. 18 para. 46(2A)(b) omitted (17.7.2014) by virtue of Finance Act 2014 (c. 26), s. 277(4)(a) (with ss. 269-271)

F20Sch. 18 para. 46(2A)(d) and preceding word inserted (17.7.2014) by Finance Act 2014 (c. 26), s. 277(4)(b) (with ss. 269-271)

Modifications etc. (not altering text)

C14Sch. 18 paras. 46-49 applied (with modifications) (with effect in accordance with reg. 1(2) of the amending S.I.) by The Lloyds Underwriters (Tax) Regulations 2005 (S.I. 2005/3338), regs. 1(1), 7

C15Sch. 18 para. 46(2)(3) applied (28.7.2000 with application as mentioned in s. 63(4) of the amending Act) by 2000 c. 17, s. 63(1), Sch. 15 Pt. VI para. 62(3)

C16Sch. 18 para. 46(2) modified (with effect in accordance with reg. 1(2) of the amending S.I.) by The Lloyds Underwriters (Tax) Regulations 2005 (S.I. 2005/3338), regs. 1(1), 11

Assessment procedureU.K.

47(1)Notice of an assessment to tax on a company must be served on the company stating—U.K.

(a)the date on which the notice is issued, and

(b)the time within which any appeal against the assessment may be made.

(2)After that notice has been served on the company, the assessment may not be altered except in accordance with the express provisions of the Taxes Acts.

Modifications etc. (not altering text)

C14Sch. 18 paras. 46-49 applied (with modifications) (with effect in accordance with reg. 1(2) of the amending S.I.) by The Lloyds Underwriters (Tax) Regulations 2005 (S.I. 2005/3338), regs. 1(1), 7

Appeal against assessmentU.K.

48(1)An appeal may be brought against any assessment to tax on a company which is not a self-assessment.U.K.

(2)Notice of appeal must be given—

(a)in writing,

(b)within 30 days after notice of the assessment was issued,

(c)to the officer of the Board by whom the notice of the assessment was given.

Modifications etc. (not altering text)

C14Sch. 18 paras. 46-49 applied (with modifications) (with effect in accordance with reg. 1(2) of the amending S.I.) by The Lloyds Underwriters (Tax) Regulations 2005 (S.I. 2005/3338), regs. 1(1), 7

C17Sch. 18 para. 48 modified (with effect in accordance with reg. 1(2) of the amending S.I.) by The Lloyds Underwriters (Tax) Regulations 2005 (S.I. 2005/3338), regs. 1(1), 10

Application of provisions to discovery determinationsU.K.

49U.K.The provisions of paragraphs 46 to 48 (assessments: general provisions as to time limits, procedure and appeals) apply to a discovery determination as they apply to an assessment.

Modifications etc. (not altering text)

C14Sch. 18 paras. 46-49 applied (with modifications) (with effect in accordance with reg. 1(2) of the amending S.I.) by The Lloyds Underwriters (Tax) Regulations 2005 (S.I. 2005/3338), regs. 1(1), 7

[F21Transfer pricing records: carelessnessU.K.

Textual Amendments

F21Sch. 18 para. 49A and cross-heading inserted (11.7.2023) by Finance (No. 2) Act 2023 (c. 30), Sch. 5 para. 2

49A(1)This paragraph applies where—U.K.

(a)the situation mentioned in paragraph 41(1) or (2) has been brought about by a person within any of paragraphs (a) to (c) of paragraph 43 (“P”) as regards a relevant accounting period of a company,

(b)the situation relates to the calculation of profits or losses in accordance with Part 4 of TIOPA 2010 (transfer pricing) for the purposes of that period, and

(c)the company has failed to comply, in relation to specified relevant transfer pricing records that relate to the calculation, with either or both of—

(i)paragraph 21 (duty to keep and preserve records), and

(ii)an information notice (within the meaning of Schedule 36 to the Finance Act 2008 (information and inspection powers)).

(2)It is to be presumed for the purposes of this Part of this Schedule that the situation mentioned in paragraph 41(1) or (2) was brought about carelessly by P, unless—

(a)the situation was brought about deliberately by P, or

(b)the company satisfies HMRC or (on an appeal notified to the tribunal) the tribunal that P took reasonable care to avoid the situation.

(3)For the purposes of this paragraph—

(a)“relevant accounting period of a company” means an accounting period in respect of which—

(i)the company, together with one or more other enterprises, constitutes an MNE Group within the meaning of the Taxes (Base Erosion and Profit Shifting) (Country-by-Country Reporting) Regulations 2016 (S.I. 2016/237) (see regulation 2(3) of those Regulations), and

(ii)the MNE Group meets the threshold requirement within the meaning of those Regulations (see regulations 3(2) to (4) of those Regulations);

(b)records are “specified relevant transfer pricing records” if—

(i)they are relevant transfer pricing records specified, or of a description specified, in regulations under paragraph 21 (duties to keep and preserve records), and

(ii)the company is required to keep and preserve those records under that paragraph.]