Overview

The Corporation Tax Act 2009 restates and slightly modifies existing laws concerning corporation tax in the UK. It clarifies rules on charging, assessing, and calculating corporation tax for companies, including those based outside the UK but operating within it. The act also introduces provisions for various tax reliefs, addressing specific sectors and company structures.

Description

This Act covers various aspects of corporation tax. It establishes the basic charge to corporation tax on company profits (income and gains), excluding those already taxed under income tax or capital gains tax. The Act details rules on company residence, determining which companies are liable for UK corporation tax. It includes extensive rules for calculating taxable profits from trading and property income, incorporating rules on deductions, capital allowances, and stock valuation. The Act also addresses specific trades (e.g., farming, securities dealing, insurance), and provides reliefs for research and development, employee share schemes, film production, and remediation of contaminated land. Significant portions of the Act deal with loan relationships, derivative contracts, and intangible fixed assets, including the use of generally accepted accounting practice (GAAP) and fair value accounting for calculations.

The Act provides specific rules for determining the residence of companies, including those incorporated in the UK and those incorporated elsewhere. It outlines the territorial scope of the charge to corporation tax and clarifies the rules for determining chargeable profits for non-UK resident companies. There are detailed sections on accounting periods and methods, including provisions for companies undergoing liquidation or administration.

Government Spending

The Act's impact on UK government spending is indirect and complex. While it doesn't directly allocate specific sums, it changes the rules for calculating tax liabilities, potentially affecting the total revenue collected by the government. Tax reliefs introduced may result in a reduction of government revenue, while clarified rules and stricter definitions could increase revenue collection. Specific financial figures are not provided within the Act itself.

Groups Affected

• Companies: The Act directly affects all UK-resident companies and non-UK resident companies operating within the UK. The impact varies depending on their size, type of business, and specific accounting practices.
• Partnerships with company members: The Act includes provisions detailing how corporation tax applies to partnerships where at least one partner is a company.
• Insurance companies: Specific rules and regulations apply to insurance companies, particularly concerning long-term insurance funds and BLAGAB (basic life assurance and general annuity business).
• Employees: The Act provides tax reliefs relating to employee share acquisition schemes, potentially impacting employee compensation and company incentives.
• Film production companies: The Act introduces specific tax reliefs for film production in the UK, affecting this sector significantly.
• Landowners and developers: Tax reliefs are available for remediation of contaminated land in the UK.
• Government: The Act's effects on government spending are indirect, potentially increasing or decreasing tax revenue based on the changes made to tax calculations and reliefs.

Powered by nyModel