Chapter 7: Recovery of unpaid corporation tax due from non–UK resident company
Overview
2896.This Chapter enables unpaid corporation tax due from a non-UK resident company to be recovered from a related company.
Section 973: Introduction to Chapter
2897.This section introduces the Chapter and defines “company” for the purposes of sections 973(1) and (4) and 974 to 980. It is based on paragraph 6 of Schedule 28 to FA 2000.
Section 974: Case in which this Chapter applies
2898.This section states when this Chapter applies. It is based on paragraph 1 of Schedule 28 to FA 2000.
2899.Subsection (2) defines “the taxpayer company” for the purposes of this Chapter.
Sections 975 and 976: Meaning of “the relevant period”; meaning of “related company”
2900.These interpretative sectionsare based on paragraph 2 of Schedule 28 to FA2000.
Section 977: Notice requiring payment of unpaid tax
2901.This section enables an officer of Revenue and Customs to serve notice on a related company requiring it to pay unpaid corporation tax due from the taxpayer company. It is based on paragraph 3 of Schedule 28 to FA 2000.
2902.Paragraph 3(1) of Schedule 28 to FA 2000 gives “the Board” (that is, the Commissioners for HMRC) the power to serve notice to pay unpaid corporation tax due from the taxpayer company. In practice, the Commissioners delegate this function to officers of Revenue and Customs, and subsection (1) reflects this. This is a minor change in the law without any practical implications; see Change 5 in Annex 1.
2903.Like the source legislation, subsection (1) provides that an officer “… may serve a notice …”. This gives officers the power, but not the obligation, to serve notice on related companies, and therefore allows HMRC to exercise managerial discretion.
Section 978: Time limit for giving notice
2904.This section sets the time limit for giving notice under section 977. It is based on paragraph 4 of Schedule 28 to FA 2000.
2905.Paragraph 4(3)(d) of Schedule 28 to FA 2000 says: “if … the Inland Revenue amend the return …”. In this context, “the Inland Revenue” is not expressly defined; however, the reference is to amendment under paragraph 34(2) of Schedule 18 to FA1998. As originally enacted, paragraph 34(2) of that Schedule referred to amendments being made by “the Inland Revenue”, which was defined in paragraph 95(1) of that Schedule to mean any officer of the Board; by implication, therefore, “the Inland Revenue” in paragraph 4(3)(d) of Schedule 28 to FA 2000 had the same meaning.
2906.Paragraph 68(a) and (b) of Schedule 4 to CRCA (a) substituted “an officer of Revenue and Customs” for “the Inland Revenue” in paragraph 34(2) of Schedule 18 to FA 1998 and (b) consequentially repealed paragraph 95 of that Schedule. Also, section 50(2) of CRCA provided that any reference in an enactment (however expressed) to an officer of the Board was to be taken as a reference to an officer of Revenue and Customs. By implication, therefore, CRCA substituted “an officer of Revenue and Customs” for “the Inland Revenue” in paragraph 4(3)(d) of Schedule 28 to FA 2000. In rewriting paragraph 4(3)(d) of that Schedule, subsection (3)(d) explicitly refers to “an officer of Revenue and Customs”.
Section 979: Amount payable in consortium case
2907.This section determines for the purposes of section 977(1)(b) the amount payable in a consortium case. It is based on paragraph 5 of Schedule 28 to FA2000.
2908.In paragraph 5(1) of Schedule 28 to FA 2000, the words “limited to” merely repeat the point that the amount to be charged in a consortium case is “the appropriate proportion” in paragraph 3(1)(b) of that Schedule. Subsection (1) therefore omits them as otiose.
Section 980: Chapter 7: supplementary
2909.This supplementary section is based on paragraph 6 of Schedule 28 to FA2000.
2910.For the sake of consistency with section 717(1) of this Act, subsection (2) refers not only to income and profits but also to losses. This verbal change has no substantive effect.
