188体育

Companies who claim AVEC and/or VGEC will have an increased corporation tax liability due to the requirement to add the credit to profit听as a taxable receipt听(see CREC35000). This will increase QIPs payable. AVEC and VGEC are听stand-alone credits听and so are听not deductions听in calculating the corporation tax liability. Consequently,听they听cannot come into the calculation of quarterly instalment payments.听

The legislation at section 1179CC听says at Step 1 that the set-off amount is to be applied in discharging any liability of the company to pay corporation tax for the accounting period. This 诲辞别蝉苍鈥檛听require it to be outstanding, just for there to be a liability. If the liability has already been paid (E.g. via QIPs) and a set-off is applied, then it means the liability becomes overpaid and a repayment arises. However, the set-off will go with a later effective date of payment (EDP) and there will be no repayment interest.听

In addition,听companies may use AVEC/VGEC to discharge a QIP at step 3听of section 1179CC, but this will depend on whether a QIP is due at the time the claim for a credit is made. Step 3听of section 1179CC听says 鈥榯he amount remaining after step 2听is to be applied in discharging any liability of the company to pay corporation tax for any other accounting period鈥�. The liabilities are those due at the time the claim is made.听

Also, once the company has submitted听a return and made a valid claim听to a credit, subject to there being no other liability (per steps 1-5听of section 1179CC), it could choose to use the credit to discharge future QIPs. These are likely to be QIPs for the following accounting period unless tax is overdue.听

As AVEC and听VGEC carry听an effective date of the date of set-off, this affects the CT interest provisions so that generally interest听will not accrue听on any amounts that are due back to the company. There may be some instances where small amounts听of interest will arise as a result of听processing procedures. HMRC will not seek听to recover these amounts.听