3369.Under paragraph 6(b) of Schedule 28A to ICTA, the amounts to be apportioned between notional accounting periods in section 768B(4)(c) of ICTA include excess business charges.
3370.Paragraph 7(1)(aa) of Schedule 28A to ICTA states how the apportionment of excess business charges is to be made.
3371.Section 768B(7) and (9)(b) of ICTA states how the apportioned charges are to be treated for the purposes of sections 75 and 338 of that Act.
3372.Paragraphs 13(1)(c) and 16(1)(aa) of Schedule 28A to ICTA are the provisions corresponding to paragraphs 6(b) and 7(1)(aa) of that Schedule which apply in a case which comes within section 768C, rather than section 768B, of that Act.
3373.The “charges” in section 768B(7) and (9)(b) of ICTA and paragraphs 6(b), 7(1)(aa), 13(1)(c) and 16(1)(aa) of Schedule 28A to that Act are charges on income. The scope of corporation tax relief for “charges on income” has been progressively cut down, and nowadays only charitable donations can rank as charges: see section 338A of ICTA, which is rewritten in Part 6 of this Act.
3374.To come within paragraph 6(b) or paragraph 13(1)(c) of Schedule 28A to ICTA, a payment must meet three conditions.
It must be a charitable donation within section 338A(2)(b) or (c) of that Act.
It must be wholly and exclusively for the purposes of the company’s business.
It must not be deductible in computing profits or any description of profits for the purposes of corporation tax (for example, as an expense of management within Part 16 of CTA 2009). See section 338A(3) of ICTA.
3375.It is not possible for a payment to meet all three of those conditions. Section 768B(7) and (9)(b) of ICTA and paragraphs 6(b), 7(1)(aa), 13(1)(c) and 16(1)(aa) of Schedule 28A to that Act are therefore obsolete, and are repealed without replacement.