CREC071700 - Expenditure credit redemption: Step 5

S1179CC CTA 2009听

Any amount remaining听after Step 4 is used to discharge any other liability of the company to pay a sum to HMRC. This includes both:听

  • liabilities reported elsewhere on the CT600 tax return, such as section 455 tax on loans to company participators听

  • liabilities outside Corporation Tax 鈥� for example, an outstanding VAT charge or liabilities under any contract settlement听

Only liabilities that are outstanding are discharged. A company cannot use credit to discharge tax already paid and receive a refund.听

Example:听

Production Company A has 拢100,000 credit remaining听after Step 4. It also has an unpaid VAT liability of 拢15,000.听

At Step 5, the VAT liability is fully discharged and reduced to nil. Production Company A has 拢85,000 credit remaining听to carry forward to Step 6.听