Introduction Details of the Schedule Part 11 – Consequential Amendments and Commencement
209.Paragraph 95 adds regulations made under paragraphs 24 to 26, 36 and 38 of this Schedule, which deal with the allocation of disallowed amounts and exempt amounts, to the list of specified provisions given in section 98 of the Taxes Management Act 1970. Failure to comply with a notice given under a provision specified in section 98 may result in a penalty as set out in that section.
210.Paragraph 96 makes the amendment necessary to ensure that the transfer pricing rules at Sch 28AA ICTA take priority over the Schedule. This ensures that adjustments to financing income made under the Schedule will not be reinstated by transfer pricing rules. It also ensures that financing expenses disallowed under the Schedule cannot also be disallowed by the transfer pricing rules.
211.Paragraph 97 gives the commencement rule for the Schedule, which, subject to paragraph 98, takes effect for periods of account of the worldwide group that begin on or after 1 January 2010. The periods of account of the worldwide group are defined in paragraph 87(3) by reference to the consolidated financial statements of the ultimate parent of the group.
212.Paragraph 98 provides an anti-avoidance rule to prevent the ultimate parent of a worldwide group manipulating its accounting date to take advantage of the commencement provisions at paragraph 97. By moving its accounting date from 31 December 2009 to 30 December 2009, a group would ensure that the Schedule did not apply to it for a further 12 months. Paragraph 98 applies where the main purpose, or one of the main purposes, of a group changing its accounting date is to achieve such a result. Its effect is to apply the provisions of Schedule 15 to the accounting period beginning immediately after the changed accounting date.
213.Paragraph 99 explains how the Schedule will deal with amounts that accrue in the financial statements of a company for a period, but are not brought into account for corporation tax purposes until a later period. If those amounts would have been brought into account for the purposes of corporation tax in a period beginning before 1 January 2010 but for one of the statutory provisions listed in sub-paragraph (2), they cannot be treated as either financing expense amounts or financing income amounts of the company. This ensures that the provisions of the Schedule can only apply to amounts that accrued in periods in respect of which the Schedule has effect.