Corporate tax deadlines

Annual tax on enveloped dwellings (ATED) - returns

Deadline for action: 30 April 2018

Issue: 2018/19 and amended 2017/18 ATED returns, and 2018/19 relief declaration returns, are generally due by 30 April. HMRC will provide a pre-return banding check (PBRC) to confirm a property’s valuation band (generally as at 1 April 2017). For relevant high value residential properties, the ATED liability depends on the valuation band the property falls within. A PRBC will be helpful where the property’s value is close to valuation band limits.

Action: Except where a later filing date applies, property owners should submit their ATED returns by 30 April 2018. They can apply for a PRBC where there is ‘reasonable belief’ the property value is within 10 per cent of a banding threshold. Although HMRC will not confirm the specific valuation, PRBCs should be applied for well before submitting the ATED tax return (which is due even if the ATED is fully relieved).

Annual tax on enveloped dwellings (ATED) - payment

Deadline for action: 30 April 2018

Issue: Any 2018/19 and additional 2017/18 ATED due must be paid by 30 April 2018, or the return filing date where a later filing date applies. ATED arises on UK residential properties valued above £500,000 (generally as at 1 April 2017) that are owned by UK or non UK non-natural persons, including companies, certain collective investment schemes and certain partnerships.

Action: Owners of affected properties should pay any ATED due by 30 April 2018. The ATED liability depends on the valuation band the property falls within as follows:  

  • £500,001 - £1m - £3,600 (2018/19) £3,500 (2017/18)
  • £1m - £2m - £7,250 (2018/19) £7,050 (2017/18)
  • £2m – £5m - £24,250 (2018/19) £23,550 (2017/18)
  • £5m – £10m - £56,550 (2018/19) £54,950 (2017/18)
  • £5m – £20m - £113,400 (2018/19) £110,100 (2017/18)
  • Over £20m - £226,950 (2018/19) £220,350 (2017/18)

The charge is reduced on a pro-rata basis where, for example, the property is only owned or meets one of the exemptions for part of the period.

Deadline for 2017 automatic exchange of information reporting to HMRC

Deadline for action: 31 May 2018

Issue: Certain UK entities (eg financial institutions and personal investment companies) may be required to submit a report to HMRC under the automatic exchange of information (AEOI) legislation. Such entities may need to have registered with HMRC and, for US Foreign Account Tax Compliance Act (FATCA) reporting, the US Internal Revenue Service (IRS).

Action: Entities should review their position to establish whether they have any AEOI registration and reporting obligations for 2017. Those that do have such obligations should register with and report to HMRC (and register with the IRS) as applicable. Nil reports are not usually required.

Corporation tax return filing and claims

Deadline for action: 30 June 2018

Issue: Companies are required to file their corporation tax return and make claims by the relevant anniversary of their accounting reference date. Those with a 30 June 2017 accounting reference date must file their corporation tax return by 30 June 2018 and must also make any relevant outstanding claims and elections for the years ended 30 June 2016 (eg R&D tax relief claims) and 30 June 2014.

Action: Companies with 30 June year ends should ensure their 2017 corporation tax return is filed by 30 June 2018 to avoid late filing penalties. They should also ensure that claims and elections for earlier years are made by 30 June 2018 to benefit from them.

Publication of tax strategy

Deadline for action: 30 June 2018

Issue: Large businesses are required to publish details of their tax strategy (including certain prescribed information), on the internet, by the end of their accounting period. Large businesses include multinational groups (with global turnover exceeding €750m), other groups or single UK entities (UK companies, partnerships and permanent establishments) with UK turnover exceeding £200m or gross assets exceeding £2bn.

Action: The head UK entity of a relevant large business with a 30 June 2018 accounting reference date should ensure that it has published the group’s tax strategy, including all prescribed information, in an internet location that is accessible to the public free of charge until the following year’s strategy is published, by that date. Penalties for failure to comply with the requirements start at £7,500.

Provide senior accounting officer certificate

Deadline for action: 30 June 2018

Issue: Senior accounting officers (SAO) of certain companies that are large companies or members of large groups are required to provide HMRC with an annual certificate no later than the Companies House filing date for the company’s accounts. The SAO certificate must state whether or not the company had appropriate tax accounting arrangements throughout the financial year and, if not, provide appropriate details. Large companies and large groups for this purpose are those with UK turnover exceeding £200m or gross assets exceeding £2bn.

Action: SAOs of relevant public companies with a 31 December 2017 period end and SAOs of other relevant companies with a 30 September period end must provide their certificate to HMRC by 30 June 2018. SAOs are liable for penalties of £5,000 for failure to maintain appropriate tax accounting arrangements and £5,000 for failure to provide an accurate certificate.

Country-by-country reporting – parent entity notification

Deadline for action: 30 June 2018

Issue: UK companies (or other entities) that are the ultimate parent entity of a multinational group (with global turnover exceeding €750m) are required to notify HMRC that they are responsible for filing an annual country-by-country report to HMRC for an accounting period by the relevant accounting reference date. UK ultimate parent entities of multinational groups with a 30 June 2018 accounting reference date must notify HMRC that they are responsible for filing an annual country-by-country report by 30 June 2018 and provide details of relevant group entities.

Action: Such UK group parent entities with 30 June year ends should ensure their 2018 country-by-country reporting notification is made by 30 June 2018 to avoid penalties.

Country-by-country reporting – filing report

Deadline for action: 30 June 2018

Issue: UK companies (and other entities) that are the ultimate parent entity (or, in certain circumstances, another member) of a multinational group (with global turnover exceeding €750m) are required to file an annual country-by-country report to HMRC by the relevant anniversary of their accounting reference date. UK multinational group entities with a 30 June 2017 accounting reference date that are not exempted from doing so must file their country-by-country report by 30 June 2018.

Action: Affected UK group entities with 30 June year ends should ensure their 2017 country-by-country report is filed by 30 June 2018 to avoid late filing penalties.

Country-by-country reporting – entity notification

Deadline for action: 30 June 2018

Issue: Certain UK companies (and other entities) that are members of but are not the ultimate parent entity of a multinational group (with global turnover exceeding €750m) must notify HMRC whether they, and other group entities, are exempt from filing an annual country-by-country report by their accounting reference date. Such UK multinational group entities with a 30 June 2018 accounting reference date must notify HMRC by 30 June 2018 of which exemption, if any, applies and, if so, provide details of: the group entity that will submit a country-by-country report and the relevant jurisdiction; and, other relevant group entities.

Action: Affected UK group entities with a 30 June 2018 year end should ensure their 2018 country-by-country report notification is made by 30 June 2018 to avoid penalties.

Country-by-country reporting – entity confirmation

Deadline for action: 30 June 2018

Issue: Certain UK companies (and other entities) that are members of but are not the ultimate parent entity of a multinational group (with global turnover exceeding €750m) for which another UK entity has notified HMRC of whether they are exempt from filing an annual country-by-country report, must confirm details of the UK notifying entity by their accounting reference date. Such UK multinational group entities with a 30 June 2018 accounting reference date must confirm to HMRC which UK entity has met the notification obligation on their behalf by 30 June 2018 and the date of the notification.

Action: Affected UK group entities with a 30 June 2018 year end should ensure their 2018 confirmation is made by 30 June 2018.

Country-by-country reporting – confirmation of other entity filing report

Deadline for action: 30 June 2018

Issue: UK companies (and other entities) that are members of a multinational group (with global turnover exceeding €750m) and that are not required to file an annual country-by-country report to HMRC are required to confirm that a report has been filed by the relevant anniversary of their accounting reference date. UK multinational group entities with a 30 June 2017 accounting reference date that are exempt from filing a country-by-country report must confirm details of the entity that has filed the report, the relevant jurisdiction and the filing date by 30 June 2018.

Action: Affected UK group entities with 30 June year ends should ensure their 2017 country-by-country reporting confirmation is made by 30 June 2018.

Corporate interest restriction – group reporting company

Deadline for action: 30 June 2018

Issue: Groups of companies with net UK corporate interest expense and other financing costs exceeding £2m are subject to the corporate interest restriction rules from 1 April 2017. Such groups that wish to nominate a group reporting company to submit the group’s interest restriction return for an accounting period (and subsequent accounting periods) must notify HMRC (or revoke an earlier notification) of the eligible UK group reporting company within six months of the end of the accounting period. If no group company is nominated, HMRC will nominate one.

Action: Affected groups with an accounting period ending on or prior to 31 December 2017 that wish to do so, should nominate an eligible UK group reporting company. That company should ensure it is authorised by 50 per cent of eligible UK group companies and give notice to HMRC that it is the group reporting company by 30 June 2018.

Corporate interest restriction – qualifying public infrastructure companies

Deadline for action: 30 June 2018

Issue: Groups of companies with net UK corporate interest expense and other financing costs exceeding £2m are subject to the corporate interest restriction rules from 1 April 2017. Companies providing public infrastructure assets may qualify for alternative interest restriction rules that may give rise to reduced interest restrictions. Qualifying companies that wish to elect for the alternative treatment to apply, must do so by the end of the accounting period they wish the alternative treatment to apply from. 

Action: Companies that meet the requirements to be treated as qualifying infrastructure companies with a 30 June period end that wish to apply the alternative treatment in the year ending 30 June 2018 should elect to do so by 30 June 2018. Additional requirements and elections may apply to joint venture arrangements involving public infrastructure companies.

Corporate interest restriction – group ratio - election for accounting periods

Deadline for action: 30 June 2018

Issue: Groups of companies with net UK corporate interest expense and other financing costs exceeding £2m are subject to the corporate interest restriction rules from 1 April 2017. When applying the group ratio rule, the corporate interest restriction legislation applies standard rules to determine the relevant group accounting period end date when no group accounts are prepared or the ultimate parent company does not prepare company accounts. The ultimate parent company may elect for a different accounting period end date to apply by that date. 

Action: Affected groups should consider whether they wish to apply an alternative accounting period end date for purposes of the group ratio rule calculation. If the group wishes to do so and to apply a 30 June period end date, it should ensure the ultimate parent company makes an irrevocable election by 30 June 2018.

Corporate interest restriction – creditor relationships determined on basis of fair value accounting

Deadline for action: 30 June 2018

Issue: Groups of companies with net UK corporate interest expense and other financing costs exceeding £2m are subject to the corporate interest restriction rules from 1 April 2017. For purposes of calculating tax interest expense and tax interest income to apply the corporate interest restriction, companies that account for creditor relationships (receivables) on a fair value accounting basis may make an irrevocable election for these amounts to be instead determined on an amortised cost basis of accounting within 12 months of the end of the first relevant accounting period in which fair value accounting is applied.

Action: Affected groups and companies should consider whether they wish to apply the amortised cost basis of accounting for such creditor relationships. Companies with a 30 June 2017 period end date that wish to do so should make an irrevocable election by 30 June 2018.

Corporate interest restriction – interest restriction return

Deadline for action: 30 June 2018

Issue: Groups of companies with net UK corporate interest expense and other financing costs exceeding £2m are subject to the corporate interest restriction rules from 1 April 2017. The appointed group reporting company of groups subject to the corporate interest restriction must submit an interest restriction return (full, or abbreviated if conditions met) on behalf of the group by the anniversary of the group’s accounting reference date (or 30 June 2018 if later) to report interest restrictions, reactivations and unused interest allowance.

Action: Those with a 30 June 2017 or prior accounting reference date must file their interest restriction return by 30 June 2018, to include relevant elections for that and, where relevant, subsequent periods, including: group ratio election; group ratio (blended) election; group EBITDA (chargeable gains) election; interest allowance (alternative calculation) election; interest allowance (non-consolidated investment) election; interest allowance (consolidated partnerships) election; and, abbreviated return election.

Foreign branch profits exemption election

Deadline for action: 30 June 2018

Issue: UK companies with foreign branch profits arising in territories with an effective tax rate lower than the UK rate may benefit from claiming exemption from UK corporation tax on those profits. Companies must elect for exemption, which applies to all profits and losses of all foreign branches of the entity making the irrevocable election, before the start of the first accounting period for which exemption will apply. Those with a 30 June accounting reference date must elect by 30 June 2018 for the exemption to apply from 1 July 2018.

Action: Companies with foreign branch operations should review all their overseas branch activities before the start of the first period to which exemption would apply to determine the overall impact of making a foreign branch exemption election. Where it is considered appropriate to make the election, companies should ensure the election is filed before the start of the first exempt period.

Payment of gift aid by charity subsidiaries for the year ended 30 September 2017

Deadline for action: 30 June 2018

Issue: Companies wholly owned by charities can set gift aid donations paid in the nine months following the year end against taxable profits for the year. Where a charity uses a subsidiary company to undertake non-charitable activities, such as trading, it is possible for the corporation tax that would otherwise be due on the profits to be reduced by way of a gift aid payment of those profits.

Action: Gift aid donations for the year ended 30 September 2017 must be physically paid by 30 June 2018. Subject to available reserves, the amount of gift aid may be based on what would otherwise be the taxable profits so as to ensure that the payment may be optimised, but only non-repayable payments of money, such as a cheque or bank transfer (not book entries on inter-company account), qualify.

Diverted profits tax (DPT)

Deadline for action: 30 June 2018

Issue: A company generally has a duty to notify HMRC if it is potentially within the scope of DPT. Companies which are potentially within the scope of DPT in an accounting period must notify HMRC within three months of the period end.

Action: Those with a 31 March 2018 year end must notify HMRC if they have profits arising which potentially come within the scope of DPT unless, for example, no charge to DPT would arise for the period. HMRC has confirmed that companies do not have to notify in certain circumstances, but advice should be taken to confirm the position.

Corporation tax payment due

Deadline for action: 1 July 2018

Issue: Companies with a tax liability falling outside the quarterly instalment payment regime must settle their liability to corporation tax and tax on loans or benefits to participators within nine months and one day after the period end. Companies with a 30 September 2017 period end that fall outside the quarterly instalment payment regime, or that fall within the regime but have a remaining liability, must settle their corporation tax liability by 1 July 2018.

Action: Companies with a 30 September 2017 period end should calculate their liability to corporation tax and tax on loans or benefits provided to participators and make full and final payment by 1 July 2018 to avoid interest on late tax. The increased ‘normal’ rate of interest will apply to tax payments made after 1 July 2018 by companies that fall within the quarterly instalment payment regime.

Corporation tax instalment payments due for large companies

Deadline for action: 14 July 2018

Issue: Large companies are generally required to make four corporation tax instalment payments, six months and 14 days after the start of their accounting period and every three months thereafter. Those with a 31 December 2018 accounting reference date are required to make their first corporation tax instalment payment on 14 July 2018. Second, third or fourth instalment payments are due on the same day for large companies with 30 September 2018, 30 June 2018 and 31 March 2018 period ends respectively.

Action: Companies should consider whether or not they are large companies under the corporation tax quarterly instalment payment regime and, if so, should make arrangements to calculate and pay any instalments due.

For more information please get in touch with Melanie Reed, or your usual RSM contact.