Section 270 Amount charged

United Kingdom

F1(A1)

Where a person is chargeable to domestic top-up tax for an accounting period as, or in respect of, a qualifying entity which is a member of a group, the amount (if any) the person must pay is determined as follows—

Step 1
Determine (in accordance with section 272)—
1. (a)
  whether the entity has a top-up amount for that period, and
2. (b)
  the extent of any such amount.
Step 2
If the result of Step 1 is not expressed in sterling, convert the result of that Step to sterling.

(1)

Where a person is chargeable to domestic top-up tax for an accounting period F2as or in respect of a qualifying entity which is not a member of a group, the amount (if any) the person must pay is determined as follows—

Step 1
Determine F3(in accordance with section 273) whether the entity has any top-up amounts or additional top-up amounts for that period and the extent of those amounts.
Step 2
Determine the sum of those amounts.
Step 3
If the result of Step 3 is not expressed in sterling, convert the result of that Step to sterling.

(2)

Generally, a qualifying entity will have a top-up amount for an accounting period if it has profits for a period and its effective tax rate (or, where it is a member of a group, that of its group) is less than 15%.

(3)

Chapter 3 of this Part makes provision, principally by applying (with modifications) provisions in Part 3, for determining—

(a)

the effective tax rate of a qualifying entity by reference—

(i)

in the case of an entity that is a member of a group, to the profits of, and the taxes payable by, members of the group that are located in the United Kingdom, or

(ii)

in the case of an entity that is not a member of a group, to its profits and to the taxes payable by that entity.

(b)

those profits,

(c)

which taxes (referred to as “covered taxes”) are to be considered in the determining effective tax rates,

(d)

top-up amounts, and

(e)

additional top-up amounts.

F4(4)

The exchange rate to be used for a conversion to sterling required by Step 2 in subsection (A1) or Step 3 in subsection (1) is—

(a)

the average exchange rate published by the European Central Bank for the accounting period in question;

(b)

where no such rate is published by the European Central Bank, the average exchange rate published by the Bank of England for the accounting period in question;

(c)

where no such rate is published by either the European Central Bank or the Bank of England, such rate as appears, on a just and reasonable basis, to reflect the average exchange rate for the accounting period in question.

Annotations

Textual amendments

F1: S. 270(A1) inserted (with effect in accordance with Sch. 4 para. 72(4) of the amending Act) by Finance Act 2025 (c. 8), Sch. 4 paras. 42(2), 72(4)
F2: Words in s. 270(1) substituted (with effect in accordance with Sch. 4 para. 72(4) of the amending Act) by Finance Act 2025 (c. 8), Sch. 4 paras. 42(3)(a), 72(4)
F3: Words in s. 270(1) inserted (with effect in accordance with Sch. 4 para. 72(4) of the amending Act) by Finance Act 2025 (c. 8), Sch. 4 paras. 42(3)(b), 72(4)
F4: S. 270(4) inserted (with effect in accordance with Sch. 8 para. 53(5)-(13) of the amending Act) by Finance Act 2026 (c. 11), Sch. 8 paras. 35, 53(5)-(13)