August 2024 United Kingdom

1.096

1.028

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We've added support for the merged scheme RDEC, which applies to both SMEs and large companies for periods starting on or after 1 April 2024.

We've updated the existing

Utilisation of RDEC

sheet to reflect the new requirements introduced by Finance Act 2024, ensuring:

The step 2 calculation correctly applies the applicable CT rate for the period. The small profits rate applies when profits (before RDEC) are less than the marginal limit or when there's a loss. Otherwise, the main rate applies.
Note: For periods starting before 1 April 2024, the main tax rate remains the only applicable CT rate applied at step 2, as per the original legislation.
We've developed a new sheet to calculate the new tax credit cap. When an amount remains after step 2 and the tax credit cap exception doesn't apply, you'll receive a warning to insert the new R&D tax credit cap sheet. On this sheet, you can enter the company's Relevant PAYE and NIC liabilities. The system will multiply the net total by three and add it to the 'minimum amount' to calculate the tax credit cap. This amount then links back to the Step 3 restriction section on the Utilisation of RDEC sheet.
Note: For periods starting before 1 April 2024, the Total expenditure on workers cell within the Step 3 restriction section will continue to be used, as per the original legislation.

We've identified an issue with boxes L75 and L80 of the CT600L for periods starting on or after 1 April 2024. The guidance doesn't clearly explain how to complete these boxes when the tax credit cap exception applies. Currently, you can't e-file your CT600L if the tax credit cap applies within your RDEC calculation due to this issue.

We've contacted HMRC and await their guidance on this matter.

We've added a new sheet to support the Enhanced R&D intensive support scheme, available to loss-making, R&D-intensive SMEs for periods starting on or after 1 April 2024.

The new

Enhanced R&D intensive support

sheet functions similarly to the existing

R&D enhanced expenditure

sheet. It calculates the additional deduction and includes a data entry section for you to input the company's relevant PAYE and NI liabilities, which we use in the tax credit cap calculation. The

Payable tax credits

sheet still performs the actual tax credit cap calculation and determines any credit repayable to the company under the ERIS scheme.

Note that we've identified an issue with boxes L168 and L169 of the CT600L for periods starting on or after 1 April 2024. The guidance doesn't clearly explain how the new legislation within CTA 2009 s1112C(2), relating to Steps 1, 2 and 3, aligns with these existing CT600 boxes. Currently, any amount you enter as a Step 3 amount doesn't link to the CT600L.

We've contacted HMRC and await their guidance on this matter.

We've added new sheets to support the new audio visual and video games expenditure credits available from 1 January 2024.

To develop the new set of sheets:

On the Adjustment to profit sheet, choose 'Creative industries' as the Type of trade.
Select either Film, Television or Video games as the Type of creative industry.
Choose 'Yes' to 'Is the production claiming AVEC or VGEC?'
You'll then see prompts to develop the Creative industry profit and loss sheet and the Utilisation of creative industry expenditure credit sheet.

On the Creative industry profit and loss sheet, enter all relevant income and costs related to your creative industry. The system will automatically post any necessary adjustments under the creative industry regime to the Adjustment to profit sheet. It will also link relevant costs to the Creative industry expenditure credit sheet to calculate the period's expenditure credit. This credit then posts to the Adjustment to profit sheet. For loss-making creative industries, the Creative industry losses sheet handles these amounts. At the bottom of the Creative industry profit and loss sheet, you'll find a "Core expenditure condition" section. Enter your UK planned core expenditure amount and the total core expenditure amount here to ensure correct disclosure to HMRC.

The Creative industry expenditure credit sheet posts the calculated credit to the Utilisation of creative industry expenditure credit sheet. This sheet then follows the six steps for redeeming the expenditure credit as set out in legislation:

It sets out the corporation tax liability for "step 1"
Calculates the Restriction to net value of set off for "step 2"
Allows you to enter:
Set off in other periods at "step 3"
Surrendered as group relief at "step 4"
Payable to the Commissioners at "step 5"
Amounts extinguished under 1179CG or 1179CH

Any "step 2" restriction automatically carries forward to the next period and offsets where possible, unless you show it as Surrendered as group relief.

We've updated the tax accounting sheets for these computational changes. We've included relevant amounts on the Tax Account and Accounts disclosures sheets and supporting sheets, but you can edit these cells if needed or if you prefer to account for things differently. You must manually adjust for any unrecognized "step 2" amounts on the net temporary/timing differences sheets.

These changes apply to FY23 and FY24.

Starting from 1 April 2024, at least 10% of the "core costs" for creative industry tax reliefs must relate to UK activities. This changes the previous requirement of 25% of "core costs" being related to the UK or European Economic Area (EEA). However, transitional provisions may allow you to continue qualifying under the 25% conditions for a limited time.

To ensure correct disclosure of core expenditure to HMRC, we've added a new section at the bottom of the

Creative industry profit and loss

sheet. Here, you can enter details of your total planned expenditure and specify how much relates to UK or UK/EEA expenditure. You need to enter this information each period, but we'll roll forward the prior period information as a memo.

Since the core expenditure requirements consider the entire production period rather than individual periods, we've removed some checks to the core requirement percentages within the calculations themselves.

We've implemented these changes for both FY23 and FY24.

We've improved REIT functionality based on feedback, including:

We now ensure the REIT type rolls forward to the following period.
We've corrected date formats across all sections of the Analysis of REIT distributions sheet.
We've updated the Group financial statements reporting sheet to include companies with no amounts, ensuring their inclusion in the XML output.
We've added a switch allowing you to automatically forgo losses arising in a period, preventing them from carrying forward.
We've enabled the support sheets for the Group financial statements reporting sheets to roll forward. After rolling forward, you should perform a full refresh by selecting Refresh > Manage sources, then ticking all and selecting Refresh.
We've updated the formatting on the non-OCT sheet to ensure accurate transfer of Company financial statement reporting details to the group level.

We've implemented these changes for FY23 and FY24 for all items above, and for FY22 for items 2 and 4.

We've added a warning to the Group financial statements reporting sheet. This warning will alert you when the required support sheet for one or more companies hasn't been developed.

We've implemented this change for both FY23 and FY24.

We've updated the REIT summary information sheet in company files to reflect the new tax-exempt business condition introduced by Finance (No.2) Act 2023 into CTA 2010 s529. You'll see this new condition under the heading "Tax exempt business conditions – CTA 2010 s529" when you select the "Single company REIT" option as the "REIT type". We've also added a YES / NO selector for this condition, similar to the existing conditions.

The new condition reads: "The property rental business involves at least 1 property the value of which is equal to, or exceeds, £20 million at the relevant time and which is designed, fitted or equipped for the purpose of being rented, and is rented or available for rent, as a commercial unit".

We've implemented this change for both FY23 and FY24.

We've addressed several e-filing issues related to the new associated companies sub-section on page 4 of the CT600 (2024). These issues affected how the rest of the "Tax calculation" section is completed when there are different types of self-assessment income not included within the PCTCT.

After corresponding with HMRC, we've updated the completion of boxes 330 to 345 of the tax calculation. Our aim is to ensure calculations file without error in these scenarios:

When you've manually set the computation as either "large" or "very large"
When a CFC charge or the Bank levy causes the company to be "large" or "very large"
When a ring fence company has no non-ring fence profits
When a Life company has no shareholders' profits

We've implemented these changes for both FY23 and FY24.

We've updated our e-filing and tagging functionality to address several issues:

We've fixed XML export problems that users reported, particularly for:
Box 730 of the CT600
Box L166 of the CT600L
We've corrected incorrect negative tagging of values when exporting to HTML, which we identified during our internal testing. This affects:
Double tax relief
ACT set against CT
Land remediation tax credit payable

We've implemented these changes across FY22, FY23, and FY24.

HMRC has updated their guidance on completing box 4 of the CT600 for companies in liquidation. You can find this updated information at Completing your Company Tax Return - GOV.UK (www.gov.uk).

Here's what you need to know:

In the first year of liquidation:
If you're claiming marginal relief or small companies' rate (and therefore checking box 329), set box 4 to "0" to indicate a normal computation.
In the second or subsequent years of liquidation:
Set box 4 to "3" to show the company is in liquidation.
Note that you can't claim the small companies rate or marginal relief in these years.

Remember, you should only use "3" in box 4 from the second year of liquidation onwards, not in the first year if you're claiming marginal relief or the small companies' rate.

Finance Act 2024 has expanded the tonnage tax regime to include managing qualifying ships as a qualifying activity. It has also introduced specific daily profit rates and other regulations.

HMRC has informed us that they won't amend the CT600F to accommodate these changes until April 2025. We've asked HMRC for guidance on how to handle this in the CT600 (2024) in the meantime, but we haven't received any instructions yet.

Given this lack of clarity, we've decided to hold off on making any changes to the Tonnage tax sheets within ONESOURCE. We'll wait until we know exactly what data HMRC requires and in what format. Once we have this information, we'll review and implement the necessary changes.

We'll keep you updated on any developments regarding this issue. In the meantime, you should continue using the current version of the Tonnage tax sheets, but be aware that they don't yet reflect the new provisions from Finance Act 2024.

We've deployed the 2024 computation taxonomies provided by HMRC. We've made the following updates where relevant and practical:

Added new tags
Removed obsolete tags
Amended existing tags as required

We've implemented these changes for FY24.

We've enhanced the sorting capabilities in the Group module, allowing you to specify a precise order for rows and columns across multiple sheets. Previously, you could only sort rows manually using ascending/descending options, which limited your control over the order.

New Features:

When you select the 'Sort' button, it will automatically sort all sheets based on the 'Sort Order', ensuring a consistent and customizable order across all sheets. The sorting applies alphabetically based on the 'Sort Order'.

We've implemented these changes for both FY23 and FY24.

We've made a full review of the formatting of the non-OCT sheet to ensure that all details push up to group correctly, including dropdown and "tick" selectors.

We have made these changes for FY23 and FY24.

A correction has been made on the

Corporate interest restriction – values

sheet to remove tonnage tax profits from the

Adjusted corporation tax earnings

value for the calculation of Tax-EBITDA for CIR purposes.

This change has been made for FY23 and FY24.

The new benchmark price of £77.94, effective from 1 April 2024 to 31 March 2025, has been added to the

Electricity generator levy

sheet.

Where the period straddles 1 April 2024, the relevant

Megawatt hours

for the periods up to 31 March 2024 and from 1 April 2024 must be entered in the relevant row in the

Generation receipts that are not exceptional

table, and the

Generation receipts

for each period will be calculated.

This change is applicable only for FY24.

We have corrected an error in the

Adjustment to losses brought forward / back relating to finance costs

section of the

Supplementary charge for ring fence trades

sheet. The error could have caused a negative

Losses brought back value

when adjusting for financing costs.

This change has been made for FY22, FY23 and FY24

We have updated the ‘Other income’ row within the

Double tax relief

sheet to include

Tonnage tax profits

from the

Profits and gains computation

sheet.

This change has been made for FY23 and FY24.

We have corrected a number of general issues identified, either during our testing or reported to the support team, including:

Updating the
Double tax relief
sheet to ensure brought forward non-trading deficit is offset against "Other property income" when applicable.
Correcting the misalignment of some the “tick” boxes on the
Supplementary charge
sheet.
Updating CT600 box 326 to avoid double counting of associated companies in certain scenarios involving CFCs.
Ensuring exempt companies do not print on the
CFC summary
sheet by default, although this can be over-ridden if required, and so are also not included in the CT600B.
Adding an error trap to the FY23 template where amounts are entered in the “Coronavirus job retention scheme” boxes 471 to 474, and removing the entry cells from the FY24 template.
Updating the
Freeports or investment zones
sheet for the new special tax sites. FY23/24
Amending the "Basis for exemption" column on the
Exempt dividends
sheet to print in final.
Adding a validation to the
Chargeable disposal
sheet to ensure a “Date of disposal” is entered where only incidental selling costs are included.
Ensuring correct rates are applied on the
Tax rate calculation
sheet for AIF computations.
Ensuring “Tonnage tax profits” are excluded from profits shown as being available for group relief in the
Group relief matrix
.
Adding signage prompts to the
Unpaid remuneration
sheet.
Updating the validations on the
Carried forward losses
sheet to reduce consequential errors elsewhere in the computation.
Updating date formats on all the group relief claims and surrenders sheets.

These changes have been made for FY23 and FY24 for all of the above, plus FY22 for item 9.

We have been made aware of a validation error being caused by a small rounding difference when there were both oil production ring fence and non-ring fence profits chargeable to corporation tax.

On investigation, we found the issue was specific to periods straddling financial years, meaning that to calculate tax for submission purposes the total profits are being apportioned between ring fence and non-ring fence profits, then again between financial years.

The apportionment methodology used by ONESOURCE obviously differs slightly from that used by HMRC when validating the figures for online submission, which meant that in some instances there was a small rounding difference that exceeded the tolerance HMRC allow.

We have added additional cross-checks to our calculations to ensure that the apportioned figures used by ONESOURCE in the tax calculation match those used by HMRC when validating submissions.

These changes have been made for FY22, FY23 and FY24.

Change made to the

Defined benefit pension

sheet to allow tax relief on contributions to be automatically calculated, and also adjusted where there are multiple periods.

This change has been made for FY24.

Changes made to

Double tax relief

sheet to add a validation where the company has an overall trading loss but within that has foreign trading income on which withholding tax was suffered, to ensure that the trading loss is allocated against the foreign trading income from the same trade in the calculations.

This change has been made for FY23 and FY24.

Non-resident companies without a permanent establishment in the UK are not eligible to use the small profits rate or entitled to marginal relief and must pay the main tax rate when calculating the tax on any profits.

A selector has been added to the

Return information

sheet to indicate whether the company is resident outside the UK. As per the HMRC guidance here Changes and issues affecting the Corporation Tax online service - GOV.UK (www.gov.uk), they will not provide a specific entry for box 4 of the CT600 until next year, so in the meantime the type should be shown as “Close investment holding company”. The return type will automatically default to close investment holding company when the non-resident selector is set to “Yes”.

This change has been made for FY23 and FY24. Where an FY24 file has been created using the FY23 template, a change to the return type in the earlier period file will not be reflected in the later file.