Upper Tribunal Tax and Chancery Chamber

UT/2024/000060 - [2025] UKUT 00143 (TCC)

Fecha: 11-Feb-2025

law – summary of statutory background

law – summary of statutory background

21.

From 1 October 2002 to 31 March 2009, the two year limit and HMRC’s statutory discretion to extend were set out in in the s 83 Finance Act 1996. That provided as follows:

83.— Non-trading deficit on loan relationships.

(1)

This section applies for the purposes of corporation tax where for any accounting period (“the deficit period”) there is a non-trading deficit on a company’s loan relationships.

(2)

The company may make a claim for the whole or any part of the deficit (to the extent that it is not surrendered as group relief by virtue of section 403 of the Taxes Act 1988) to be treated in any of the following ways, that is to say—

(a)

to be set off against any profits of the company (of whatever description) for the deficit period;[ or]

…

(c)

to be carried back to be set off against profits for earlier accounting periods (3A) So much of the deficit for the deficit period as is not—

(a)

surrendered as group relief by virtue of section 403 of the Taxes Act 1988, or

(b)

treated in any of the ways specified in subsection (2) above, shall be carried forward and set against non-trading profits of the company for succeeding accounting periods.

…

(6)

A claim under subsection (2) above must be made within the period of two years immediately following the end of the relevant period[which, in the following subsection (7) is defined to mean the “deficit period” (which in turn is defined above at subsection (1), or within such further period as the Board may allow.

22.

The legislation in force at the time the claim was made in March 2021 (s460 Corporation Tax Act 2009) similarly provided for a 2 year time limit after the deficit period ended, or “such further period as an officer of Revenue and Customs allows.”