Section 1179CC Redemption of value of expenditure creditF1

If a company is entitled to, and claims, an expenditure credit under this Chapter for an accounting period, the credit is to be dealt with as follows.

• Step 1

  The amount of the credit is to be applied in discharging any liability of the company to pay corporation tax for the accounting period.

• Step 2

  Any amount remaining after step 1 is to be reduced, if necessary, to the amount given by—

  $$A-B$$

  where—

  • A is the initial amount of the credit (before step 1), and

  • B is the amount of corporation tax that would be chargeable on that amount if it were an amount of profits for the accounting period on which corporation tax was chargeable at the main rate.

  For provision about the treatment of an amount deducted under this step, see section 1179CD.

• Step 3

  The amount remaining after step 2 is to be applied in discharging any liability of the company to pay corporation tax for any other accounting period.

• Step 4

  If the company is a member of a group, it may surrender the whole or part of any amount remaining after step 3 to any other member of the group (as to which see section 1179CE).

• Step 5

  Any amount remaining after step 4 is to be applied in discharging any other liability of the company to pay a sum to the Commissioners for His Majesty’s Revenue and Customs—

  1. (a)

     under or by virtue of an enactment, or

  2. (b)

     under an agreement made in connection with any person’s liability to make a payment to the Commissioners under or by virtue of an enactment.

• Step 6

  Any amount remaining after step 5 is (subject to sections 1179CG and 1179CH) to be paid to the company by an officer of Revenue and Customs.