Annex 1: Minor Changes in the Law Change 38: Trading income: waste disposal: site preparation expenditure: drop requirements to make claim and submit plans and documents: section 142 and Schedule 1
This change drops the requirements to make a claim and submit plans and documents when making deductions under section 142.
It brings the income tax and corporation tax codes back into line.
Section 91B of ICTA allows a revenue deduction for capital expenditure on preparing a waste disposal site for use. The expenditure is spread over the life of the site by means of a formula based on the total capacity of the site and the amount of that capacity which has been used.
The company must make a claim for relief under section 91B(1) of ICTA (in such form as HMRC may direct), and submit such plans and documents as HMRC may require.
The requirement to submit plans and documents sits uneasily with Self Assessment – Part 3 of Schedule 18 to FA 1998 requires companies to keep such information and produce it in the event of an enquiry.
The section also drops the requirement to make a claim for relief, with the result that relief is simply a deduction in the company’s self-assessment. Once the requirement to submit plans and documents is removed, there seems no reason to require a claim for this particular deduction as opposed to any other.
Section 42(7) of TMA sets out the rules for making claims. Schedule 1 to this Act removes the reference to section 91B of ICTA in paragraph (a) of that subsection and does not replace it.
The claim under section 91B(1) of ICTA must be made within six years from the end of the accounting period to which it relates (paragraph 55 of Schedule 18 to FA 1998). Removing the need to claim means that companies generally have 12 months from the end of the accounting period in which to include the deduction in their self-assessment. However, mistake claims are available if too much tax has been paid as a result of omitting the deduction from the tax return.
In rare cases (involving the very late issue of a notice to make a return) the time limit for claiming a deduction is extended. In other cases (where there is no mistake in a return) the time limit is shortened.
This change is adverse to some taxpayers and favourable to others in principle but is not expected to have any practical effect.