Corporation Tax Act 2010 (c. 4)

[F1 PART 8B U.K. Trading profits taxable at the Northern Ireland rate

Textual Amendments

F1 Pt. 8B inserted (with effect in accordance with s. 5 of the amending Act) by Corporation Tax (Northern Ireland) Act 2015 (c. 21), s. 1

CHAPTER 6 U.K. Northern Ireland profits and losses etc: SMEs [F2 that are Northern Ireland employers]

Textual Amendments

F2 Words in Pt. 8B Ch. 6 heading inserted (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), Sch. 7 para. 6

357M Introductory U.K.

(1) This Chapter applies to a company that is a Northern Ireland company in an accounting period by virtue of the [F3 SME (Northern Ireland employer) condition] in section 357KA.

(2) In this Chapter—

(a) a reference to “the company” or “the accounting period” is to the company or accounting period mentioned in subsection (1);

(b) a reference to “the trade” is to any qualifying trade carried on by the company in the period.

(3) Section 357MA contains provision under which profits or losses of the trade for the accounting period are—

(a) Northern Ireland profits or losses of the trade,

(b) mainstream profits or losses of the trade, or

(c) a combination of—

(i) profits or losses within paragraph (a), and

(ii) profits or losses within paragraph (b).

(4) Further provision under which profits or losses of the trade may be Northern Ireland profits or losses of the trade, or mainstream profits or losses of the trade, is contained in—

(a) Chapters 8 to 15 of this Part, and

(b) CAA 2001 (see section 6E of that Act).

(5) This Chapter has effect for the purposes of this Part.

Textual Amendments

F3 Words in s. 357M(1) substituted (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), Sch. 7 para. 7

357MA Northern Ireland profits or losses and mainstream profits or losses U.K.

(1) Where the trade is a qualifying trade by virtue of section 357KB(1) (trade other than excluded trade), the profits or losses of the trade for the accounting period are Northern Ireland profits or Northern Ireland losses of the trade for the period to the extent that they do not arise from an excluded activity.

(2) Subsection (1)—

(a) does not apply in relation to any profits or losses of the trade that form part of the Northern Ireland profits or losses of the trade by virtue of any provision apart from this section, and

(b) is subject to any provision apart from this section under which profits or losses of the trade are mainstream profits or losses of the trade.

(3) Where the trade is a qualifying trade by virtue of section 357KB(2) (excluded trade with back-office activities), the profits, if any, determined under section 357MB as back-office profits of the trade for the accounting period are Northern Ireland profits of the trade for the period.

(4) The profits or losses of the trade for the accounting period are mainstream profits or mainstream losses of the trade for the period to the extent that they are not Northern Ireland profits or Northern Ireland losses by virtue of subsection (1) or (3) or any provision apart from this section.

(5) Subsection (4) does not apply in relation to any profits or losses of the trade that form part of the mainstream profits or losses of the trade by virtue of any provision apart from this section.

357MB Profit imputed to back-office activities U.K.

(1) To determine for the purposes of section 357MA(3) the back-office profits of the qualifying trade for the accounting period, take the following steps—

• Step 1 Multiply each back-office deduction by the relevant percentage.

• Step 2 Add together each amount calculated under step 1.

(2) In subsection (1)—

• “back-office deduction” means a deduction—

  (a)

  to which the company is entitled in calculating the profits of the trade for the period, and

  (b)

  which is in respect of back-office activities;

• “the relevant percentage” means 5%.

(3) The Treasury may by regulations amend subsection (2) so as to substitute a different percentage for the percentage for the time being specified there.

(4) Regulations under this section—

(a) may make different provision for different purposes (including, in particular, different trades or different back-office activities);

(b) may make incidental, supplemental, consequential and transitional provision and savings.]