HM Revenue and Customs Brief 12/08
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Issued 27 February 2008
The draft Corporation Tax Bill
On 22 February 2008 the Tax Law Rewrite project published for consultation
its fifth draft Bill - the Corporation Tax Bill. This represents the final stage
of a two year consultation process, the results of which are reflected in this
The remit of the project is to rewrite the existing legislation so that it is
clearer and easier to use without changing its effect apart from minor specified
changes. Accordingly, even though the ordering and detailed drafting of the
provisions may differ from the source legislation, there is no change to their
effect except where minor changes are specifically identified. These minor
changes, of which there are 107, are explained in detail in Annex 1 of the
Explanatory Notes to the draft Bill.
The draft Bill will be amended later in the year to reflect changes made by
the Finance Act 2008 to the underlying provisions and to deal with points that
arise from this consultation.
Contents of the draft Bill
The draft Bill consists of 1253 clauses and four Schedules. It includes:
- the basic corporation tax provisions including the charge to tax,
accounting periods and provisions relating to company residence
- provisions relating to trading and property income and income from other
- special provisions for companies affecting the computation of income, such
as those for loan relationships, derivative contracts and intangibles
- provisions governing particular types of expenditure, for example,
expenditure on research and development and films
This is the first of two Bills which will substantially rewrite the primary
legislation relating to corporation tax. The second will be published in draft
form in February 2009 and is expected to come into force on 1 April 2010.
The removal of Schedules and Cases
The charging of income under Schedules and Cases goes back to William Pitt’s
Act of 1799. Schedules and Cases were removed for income tax purposes by ITTOIA,
the third rewrite Act, in 2005 and are now removed by this draft Bill for
corporation tax purposes.
Inclusion of provisions already rewritten for income tax
Some of the provisions within this draft Bill rewrite, for corporation tax
purposes, source legislation which applied for both income and corporation
taxes. The relevant legislation was rewritten separately for income tax purposes
by ITTOIA. This draft Bill adopts the style of that Act so that the income tax
and corporation tax provisions will be consistent. The minor changes to the law
which were made by ITTOIA are now made for corporation tax purposes.
Origins and destinations
The material published on the HMRC website - see below, includes tables of
origins and destinations. These will assist anyone studying the draft Bill to
identify the source material for any given provision and trace what has happened
Public consultation on this Bill will run to 23 May 2008.
In particular, views are sought on 36 specific questions set out in the
explanatory notes, many of which are about proposed minor changes to the law.
Questions are not asked in respect of changes, etc that have previously been
consulted on. But comments on any aspect of the draft Bill are welcome.
The draft Bill and its explanatory notes can be viewed by visiting the
Rewrite (http://www.hmrc.gov.uk/rewrite/) area and a limited number of paper
copies are available through the contact shown below. Two versions of the draft
Bill are available on the website, one with the origins to the rewritten
legislation and one without.
Comments on the draft Bill should be sent, preferably by email, to:
Or by post to:
Tax Law Rewrite
8th floor South West Wing
About the Author
© Crown Copyright 2008.
A licence is need to reproduce this article and has been republished for
educational / informational purposes only. Article reproduced by permission of
HM Revenue & Customs under the terms of a Click-Use Licence. Tax briefs are
updated regularly and may be out of date at time of reading.
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Article Published/Sorted/Amended on Scopulus 2008-02-29 00:29:01 in Tax Articles