Updated: Updates made following 2016 Autumn Statement announcement.
Only for use by software developers and substitute form producers.
CT600 forms versions 2 and 3
HMRC publishes all the forms currently in use on these pages and identifies them by the letter ‘P’ in the table linked to this page.
To help you prepare your changes, drafts of forms not yet published, identified by the letter ‘D’, will appear in the table as soon as HMRC prepares them. Please note that no substitute forms should be published or brought into use based on drafts. HMRC asks you to wait until they publish the final versions, identified by the letter ‘P’ in the table below, before seeking substitute approval and publishing your version.
Changes following 2016 Autumn Statement
As a result of the 2016 Autumn Statement, HMRC will be issuing a CT600 Budget Insert (December 2016) and amending the CT600 guide.
Rates of Corporation Tax
To provide certainty to businesses, the government is reaffirming its commitment to the Business Tax Roadmap published at Budget 2016. This includes reducing Corporation Tax (CT) to 17% by the end of this Parliament as planned.
The government continues to work closely with the Northern Ireland Executive towards the introduction of a Northern Ireland rate of CT.
Grassroots sport deduction
Legislation will be introduced in Finance Bill 2017 (FB17) to allow qualifying expenditure on grassroots sports as a deduction from the company’s total profits in calculating the CT chargeable for an accounting period.
Companies will be able to make deductions for all contributions to grassroots sports through recognised sport governing bodies, and deductions of up to £2,500 in total annually for direct contributions to grassroots sports. Sport governing bodies will be able to make deductions for all their contributions to grassroots sports.
The measure will have effect in relation to qualifying expenditure incurred on or after 1 April 2017.
Any qualifying grassroots sports donations should be entered in box 305 (Qualifying donations). The CT600 guide will be amended in due course.
Deductions for contributions to grassroots sport
Reform of loss relief
The reforms were announced at Budget 2016. The government consulted on the measure from 26 May 2016 to 18 August 2016. Legislation will be introduced in FB17.
The reforms will have effect for accounting periods ending on or after 1 April 2017. Any profits or losses of a company with an accounting period straddling 1 April 2017 will be allocated into notional periods falling before and after that date on a time apportioned basis or, if this doesn’t give a just and reasonable result, on a more just and reasonable basis.
Losses arising from 1 April 2017 when carried forward will have increased flexibility and can be set against the total taxable profits of a company and its group members (‘loss relaxation’).
For all carried-forward losses, whenever they arose, companies will be able only to use the losses against up to 50% of profits (‘loss restriction’). Each standalone company or group will be entitled to a £5 million annual allowance. Profits within the allowance will not be restricted, ensuring 99% of companies are unaffected by the restriction.
Changes to the CT600, CT600 guide and the CT600 RIM artefacts will be made in due course.
Patent Box – cost sharing arrangements
This measure adds specific provisions to the revised UK Patent Box rules introduced in Finance Act 2016, covering the case where R&D is undertaken collaboratively by 2 or more companies under a ‘cost sharing arrangement’ (CSA). The provisions ensure that such companies are treated neutrally if they organise their R&D in this way.
It will have effect for accounting periods beginning on or after 1 April 2017 with periods straddling that date split. It will apply to intellectual property (IP) held under a CSA which comes into the arrangement on or after that date as well as IP already held at that date in a CSA which a company subsequently joins.
No change to the CT600 return form or CT600 guide is required.
Patent Box – cost sharing arrangements
Reform of Substantial Shareholding Exemption for qualifying institutional investors
The Substantial Shareholdings Exemption (SSE) exempts from the charge to tax gains or losses accruing on the disposal by companies of shares where certain conditions are met.
Legislation will be introduced in FB17 to change some of the qualifying conditions for the SSE for corporate capital gains.
The condition that the investing company is required to be a trading company or part of a trading group is being removed.
The condition that the investment must have been held for a continuous period, at minimum, of 12 months in the 2 years preceding the sale is being extended to a continuous period of 12 months in the 6 years preceding the sale. The condition that the company in which the shares are sold continues to be a qualifying company immediately after the sale is withdrawn, unless the sale is to a connected party.
For a class of investors defined as Qualifying Institutional Investors, the condition that the company in which the shares were sold is a trading company has also been removed. The legislation contains a list of Qualifying Institutional Investors.
The changes have effect for disposals on or after 1 April 2017.
No change to the CT600 return form or CT600 guide is required.
Reform of Substantial Shareholding Exemption for qualifying institutional investors
Tax deductibility of corporate interest expense
Legislation will be introduced in FB17 to limit tax deductions for interest expense and other similar financing costs, with the aim of aligning such deductions with the economic activities undertaken in the UK.
The rules will operate on a worldwide group basis to allow groups to manage any restriction across their businesses. They will apply to the net interest expense within the charge to CT, including other similar financing costs. Groups with less than £2 million of net interest expense within the scope of CT per annum won’t need to apply the rules.
The existing Debt Cap rules will be repealed and replaced with the new rules.
The measure will have effect from 1 April 2017. Where a worldwide group has a period of account (as defined for the purposes of the interest restriction rules) that spans that date, it will have to split the results of the period so that the new rules have effect from 1 April 2017.
No change to the CT600 return form or CT600 guide is required.
Tax deductibility of corporate interest expense
Museums and galleries tax relief
Legislation will be introduced in FB17 to enable eligible museums and galleries to claim tax relief for qualifying expenditure on new exhibitions, including those that tour.
The measure will have effect for qualifying expenditure incurred on and after 1 April 2017 and before 31 March 2022, though qualifying institutions will only be able to submit claims after FB17 receives Royal Assent. The legislation will include a sunset clause which means the relief will expire in April 2022 unless renewed. In 2020 the government will review the tax relief and set out plans beyond 2022.
Claims for tax relief should be entered in the creative credit boxes on the CT600. The CT600 guide will be amended in due course
Museums and galleries tax relief
Northern Ireland rate of CT: changes to small and medium-sized enterprise (SME) regime
Legislation will be introduced in FB17 to give an option for a SME which is not a Northern Ireland employer but has a Northern Ireland Regional Establishment (NIRE) to elect to use the large company rules for identifying profits and losses to which the Northern Ireland rate applies.
Changes to the CT600, CT600 guide and the CT600 RIM artefacts will be made prior to the introduction of a separate Northern Ireland rate.
Northern Ireland rate of Corporation Tax: changes to small and medium-sized enterprise regime
First-year allowances for electric charge-points
Legislation will be introduced in FB17 to provide a 100% first-year allowance (FYA) for expenditure incurred on electric charge-point equipment. It will have effect for expenditure incurred on or after 23 November 2016 and will expire on 31 March 2019 for CT and 5 April 2019 for Income Tax purposes.
Changes to the CT600 guide will be made in due course.
Capital allowances: first-year allowance for electric charge-points
Changes following March 2016 Spring Budget
As a result of the March 2016 Budget, HMRC will be issuing a CT600 Budget Insert (March 2016) and updating the CT600 and CT600 guide.
Rates of Corporation Tax
Finance (No. 2) Act 2015 reduced the CT rate for all non-ring fence profits from 20% to 19% for the financial years beginning 1 April 2017, 1 April 2018 and 1 April 2019, with a further reduction from 19% to 18% for the financial year beginning 1 April 2020.
Legislation will be introduced in Finance Bill 2016 to further reduce the CT main rate to 17% for the financial year beginning 1 April 2020 for all non-ring fence profits.
Repeal of Business Premises Renovation Allowance (BPRA)
Finance Act 2005 introduced BPRA, which allowed businesses of any size to claim 100% FYA for qualifying expenditure incurred in respect of buildings in specified assisted areas. BPRA ends on 31 March 2017 and will not be renewed.
Changes to the CT600 guide and the CT600 RIM artefacts will be made in due course.
Repeal of the Renewals allowance
Finance Act 2016 will repeal the renewals allowance with effect for expenditure incurred on or after 6 April 2016 for Income Tax purposes and from 1 April 2016 for CT purposes.
These dates align with the introduction of a new relief for domestic items for residential landlords, ensuring alternative relief for this type of expenditure is available.
No change to the CT600 return form or CT600 guide is required.
Repeal of the renewals allowance
Annual update to the Technology Lists for 100% FYA
At Budget 2016, the government announced changes to 100% enhanced capital allowances (ECAs) for energy-saving and environmentally-beneficial technologies.
The lists will be updated to:
- create a new sub-technology for early leak warning
- clarify the qualifying criteria for Leak Detection Equipment
- amend the criteria for converter-fed motors
- modify 10 existing technologies to reflect technological advances and changes in standards and clarify the qualifying criteria
- remove the Integrated Motor Drive Units
No change to the CT600 return form or CT600 guide is required.
The changes will be given effect via statutory instrument in July. A tax information and impact note will be published with the statutory instrument.
Capital allowances – business cars
The government will extend the 100% FYA for businesses purchasing low emission cars for a further 3 years to April 2021. From April 2018 the carbon dioxide emission threshold below which cars are eligible for the FYA will also be reduced from 75 grams/kilometre to 50 grams/kilometre.
From April 2018, the government will reduce the carbon dioxide emission threshold for the main rate of capital allowances for business cars from 130 grams/kilometre to 110 grams/kilometre.
The government will review the case for the FYA and the appropriate emission thresholds from 2021 at Budget 2019.
No change to the CT600 return form or CT600 guide is required.
A tax information and impact note will be published with the statutory instrument later in 2016.
Loans to participators – limited exemption for charities
Finance Act 2016 will exempt loans or advances made by close companies to trustees of charities for charitable purposes from the tax charge applied under the loans to participators rules.
The measure will apply to loans or advances made on or after 25 November 2015. Charities may refrain from accounting for any section 455 charge which could arise between this date and Royal Assent to Finance Bill 2016. However if the exemption is not ultimately approved by Parliament then charities will be liable to the section 455 charge according to the current law.
No change to the CT600 return form or CT600 guide is required.
Corporation Tax: loans to participators, trustees of charitable trusts
Loans to participators – Rate of Tax charge
Legislation will be introduced in Finance Bill 2016 to link the rates of tax chargeable in sections 455 and 464A to the dividend upper rate. It will mean an increase in the rates from 25% to 32.5% for all relevant loans made or benefits conferred by close companies on or after 6 April 2016.
Changes to the CT600 guide and the CT600 RIM artefacts will be made in due course.
Corporation Tax: rate of tax for the loans to participators charge
Orchestra tax relief
Legislation will be introduced in Finance Bill 2016 to provide a CT relief for orchestral concerts. The tax relief for orchestral concerts will allow eligible companies engaged in the production of qualifying orchestral concerts (or a series of concerts) to claim an additional deduction in computing their taxable profits. Where that additional deduction results in a loss, that loss may be surrendered for a payable tax credit.
Claims for tax relief should be entered in the creative credit boxes on the CT600. The CT600 guide will be amended in due course.
Payment dates
The government announced that the commencement of rules advancing quarterly instalment payments of CT for very large companies (those with profits greater than £20m) will be deferred for 2 years. They will now have effect for accounting periods commencing on or after 1 April 2019.
This follows representations on draft secondary legislation (regulations) and gives companies more time to transition to the new payment schedule of quarterly instalments at months 3, 6, 9 and 12 of a 12-month accounting period, which was announced at the Summer Budget 2015. The final regulations will reflect this change to give effect to the new commencement rule.
No change to the CT600 return form or CT600 guide is required at this time.
Bank loss relief restriction: amendment to restriction
Legislation will be introduced in Finance Bill 2016 to amend the rules restricting loss relief for banks announced at Autumn Statement 2014 and legislated in Finance Act 2015. The proportion of a banking company’s annual taxable profit that can be offset by carried-forward losses will be restricted to 25%. The new rules will apply with effect from 1 April 2016.
No change to the CT600 return form or CT600 guide is required.
Corporation Tax: update to bank loss relief restriction
Reform of loss relief
As announced at Budget 2016, the government will reform the rules governing certain corporate losses carried forward from earlier periods. Firstly, the reform will give all companies more flexibility by relaxing the way in which they can use losses arising on or after 1 April 2017 when they are carried forward. These losses will be useable against profits from different types of income and other group companies. Secondly, companies will have their use of carried forward losses restricted so that they can’t reduce their profits arising on or after 1 April 2017 by more than 50%. This restriction will apply to a company or group’s profits above £5 million. Carried forward losses arising at any time will be subject to the restriction. For banking companies, losses that are within the separate bank loss restriction will continue to be subject to those rules (see ‘Bank loss relief restriction: amendment to restriction’). Profits and losses subject to the oil and gas ring fence regime will be excluded from the loss reform. Following a consultation later in 2016 on the detailed design and implementation of the reform, legislation will be introduced in Finance Bill 2017.
Changes to the CT600, CT600 guide and the CT600 RIM artefacts will be made in due course.
Repeal of vaccine research relief
Vaccine research relief (VRR) was introduced in 2003 as an additional research and development tax relief for companies undertaking research in the fields of vaccines and treatments for tuberculosis, malaria and HIV/AIDS. In 2011, VRR was first reduced then withdrawn for small and medium sized enterprises. The relief is now only available to large firms and is claimed by fewer than 10 companies a year.
Legislation will be introduced in Finance Bill 2016 to repeal Chapter 7 of Part 13 of Corporation Tax Act 2009 in respect of expenditure incurred on or after 1 April 2017.
Changes to the CT600 guide and the CT600 RIM artefacts will be made in due course.
Vaccine research relief: expiry in 2017
Oil and Gas
Legislation will be introduced in Finance Bill 2016 to amend section 1 of the Oil Taxation Act 1975 to reduce the rate of Petroleum Revenue Tax to 0%, to amend section 330 of CTA 2010 to reduce the rate of the supplementary charge to 10%, and to enable HMRC to amend the cluster area and investment allowance by secondary legislation to extend the definition of ‘relevant income’ and to make any amendments in consequence of, or in connection with, this extension.
Changes to the CT600 guide and the CT600 RIM artefacts will be made in due course.
Oil and gas taxation: reduction in Petroleum Revenue Tax and supplementary charge
Patent Box – compliance with new international rules
Legislation will be introduced in Finance Bill 2016 to modify the Patent Box computation rules so that they comply with the new international framework. In particular it will remove the ‘proportional profit split’ option so that ‘streaming’ applies in all cases at the level of an IP asset, a product or a product family.
The legislation will provide that, after separating out qualifying income and the corresponding deductions, companies must allocate these to ‘sub-streams’ corresponding to the different IP assets (or products, or product families) and calculate a profit for each sub-stream. The profit figures will be calculated in a similar way as it currently is under the streaming option.
As an additional step in the calculation, this figure will then be modified to reflect the proportion of the development activity on the asset (or product, or product category) undertaken by the company itself. This will be done by applying a fraction N to the profit figures, defined as the lesser of 1 and:
N = (D+S) * 1.3 / (D+S+A+ R)
Where:
D = In-house direct expenditure on R&D
S = Expenditure on R&D subcontracted to third parties
A = Expenditure on acquisition of IP
R = Expenditure on R&D subcontracted to related parties
D, S and R will be defined using the same definitions as for the categories of expenditure in the UK R&D tax reliefs.
The final result will be the profit from the asset (or product, or product category) eligible for the reduced rate of 10% CT.
No change to the CT600 return form or CT600 guide is required.
Corporation Tax: Patent Box – compliance with new international rules
State aid modernisation
Legislation will be introduced in Finance Bill 2016 to provide HMRC with additional powers to:
- require information to be provided by the beneficiary as a condition of entitlement for tax relief
- require information to be provided for the purpose of checking that state aid requirements have been fulfilled
- disclose information through a legal gateway for the purpose of publication
Boxes to capture the amount of Enhanced Capital Allowances for Enterprise Zones and zero emission goods vehicles will be added to the capital allowances information section of the CT600. Changes to the CT600 guide and the CT600 RIM artefacts will be made in due course.
Substitute tax returns
Accurate facsimiles of the official Company Tax Return forms (based on the final paper format) can be accepted in accordance with Statement of Practice SP5/87. The design of substitute returns and supplementary pages must be centrally approved by HMRC before they are marketed or brought into use.
Archived versions of Quark return forms can be found on the National Archives.
Draft versions of CT forms
HMRC provides draft versions of the developing Company Tax return forms and supplementary pages on the internet to help software developers and substitute form producers to create their products. These versions may be subject to some minor amendments during proof reading, but any changes will be shown in the final versions published on the website.
Draft versions have no legal status and are not in a prescribed form. They must not be used by companies to deliver their Company Tax returns.
If you have any comments you can contact:
Email: andrew.hughes@hmrc.gsi.gov.uk
Drafts are only available for software developers and substitute form producers.
Draft Corporation Tax forms: summary for software developers
Current Corporation Tax forms
Source: HMRC