Revenue news

Corporation tax statement of practice

The Revenue has published a new Statement of Practice SP5/2001 on late claims to loss relief, capital allowances and group relief under corporation tax self assessment.

The statement covers the normal rules, special rules and the Revenue's approach to extending time limits for making claims in respect of such claims, and can be viewed on the Revenue website:

www.inlandrevenue.gov.uk/ctsa/sp5-2001.htm.

The text of the statement includes the following points:

'In general, the Board's approach will be to admit claims which could not have been made within the statutory time limits for reasons beyond the company's control. This would include, for example, cases where

' * at the date of the expiry of the time limit, the company or its agents were unaware of profits against which the company could claim relief, or

the amount of a profit or loss depended on discussions with an Inspector which were not complete when the time limit expired, and the delay in agreeing figures is not substantially the fault of the company or its agents.

'In such cases the Board's approach will be to admit late claims up to the amount of the profit or loss in question. Where the claim involves the withdrawal of an existing claim and the making of a fresh claim, the Board's approach will be to admit these to the extent of the profit or loss in question. …

'Reasons beyond the company's control would also include a claim where all of the following four features were present:

'* an officer of the company was ill or otherwise absent for a good reason;

'* the absence or illness arose at a critical time and prevented the making of a claim within the normal time limit;

'* there was good reason why the claim was not made before the time of the absence or illness;

'* there was no other person who could have made the claim on the company's behalf within the normal time limit.

'The Board would not, however, regard the following as reasons beyond the company's control:

'* oversight or negligence on the part of a claimant company or its agent;

'* failure, without good reason, to compute the necessary figure;

'* the wish to avoid commitment pending clarification of the effects of making a claim;

'* illness or absence of an agent or adviser to the company.

'There may be cases falling outside the general approach outlined … where it would nevertheless be unreasonable, given the overall circumstances of the case, for the Board to refuse a late claim.'

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