Corporation Tax Act 2009

Reliefs: further provision

1046 Relief only available where company is going concern

(1) A company may only make—

(a) a claim under section 1044, or

(b) an election under section 1045,

at a time when it is a going concern.

(2) For the purposes of this section a company is a going concern if—

(a) its latest published accounts were prepared on a going concern basis, and

(b) nothing in those accounts indicates that they were only prepared on that basis because of an expectation that the company would receive relief or R&D tax credits under this Chapter or Chapter 7.

(3) Section 436(2) of the Companies Act 2006 (meaning of “publication” of documents) has effect for the purposes of this section.

1047 Elections under section 1045

(1) An election under section 1045 must specify the accounting period in respect of which it is made.

(2) The election must be made by notice in writing to an officer of Revenue and Customs.

(3) The notice must be given before the end of the period of two years beginning immediately after the end of the accounting period to which the election relates.

1048 Treatment of deemed trading loss under section 1045

(1) This section applies if under section 1045 a company is treated as making a trading loss in an accounting period.

(2) The trading loss may not be set off against profits of a preceding accounting period under section 393A(1)(b) or 393B(3) of ICTA unless the company is entitled to relief under section 1045 for the earlier period.

(3) Subsection (4) applies if—

(a) the company begins, in the accounting period or a later period, to carry on a trade, and

(b) the trade is derived from the research and development in relation to which the relief mentioned in subsection (1) was obtained.

(4) In that case, so far as—

(a) the company has not obtained relief in respect of the trading loss under any other provision, and

(b) the loss has not been surrendered under section 403(1) of ICTA (surrender of relief to group or consortium members),

the trading loss is to be treated as if it were a loss of that trade brought forward under section 393 of ICTA (relief of trading losses against future trading profits).

(5) Subsection (4) is subject to section 1062 (restriction on losses carried forward where tax credit claimed).

1049 Restriction on consortium relief

(1) This section applies if—

(a) a company claims relief under section 1044 or elects to obtain relief under section 1045 in respect of an accounting period,

(b) at any time during the period the company is owned by a consortium, and

(c) at least one of the members of the consortium is a large company.

(2) The amount of the relief obtained in respect of the accounting period may not be surrendered by the company to another company, for the purposes of a consortium group relief claim, unless the other company is a small or medium-sized enterprise.

(3) A “consortium group relief claim” means a claim to group relief under section 402(3) of ICTA (group relief available between members of consortia).