Section 232: Deduction notices
460.This section says when an officer of Revenue and Customs may give a company a deduction notice. It is based on section 24(1) and (2) of F(No 2)A 2005.
461.Briefly, the officer may give a company a deduction notice if the officer considers, on reasonable grounds, that the “deduction scheme conditions” are or may be met in relation to a transaction to which the company is party.
462.Section 24(1) of F(No 2)A 2005 gives this function to the Commissioners for HMRC. In practice, the Commissioners delegate this function to officers of Revenue and Customs, and subsection (1) reflects this. See Change 2 in Annex 1.
463.Because Change 2 is made in section 232, it is also made in sections 235, 255 and 256.
464.Section 24(2) of F(No 2)A 2005 provides that the company has to be within the charge to corporation tax. This condition is rewritten more succinctly in subsection (1).
465.Subsection (2) defines the expressions “deduction notice” and “the deduction scheme conditions”.
466.Subsection (3) signposts the consequences of a deduction notice.