Finance Act, 1999

SCHEDULE 1

Amendments Consequential on Change in Rate of Corporation Tax

Section 71 .

The Taxes Consolidation Act, 1997 , is hereby amended in accordance with the following provisions of this Schedule.

1. In section 448—

(a) by the substitution of the following subsection for subsection (2):

“(2) Where a company which carries on a trade which consists of or includes the manufacture of goods claims and proves as respects a relevant accounting period that during that period any amount was receivable in respect of the sale in the course of the trade of goods, corporation tax payable by the company for that period, in so far as it is referable to the income from the sale of those goods, shall be reduced—

(a) by eleven-sixteenths, in so far as it is corporation tax charged on profits which under section 26(3) are apportioned to the financial year 1998,

(b) by nine-fourteenths, in so far as it is corporation tax charged on profits which under section 26(3) are apportioned to the financial year 1999,

(c) by seven-twelfths, in so far as it is corporation tax charged on profits which under section 26(3) are apportioned to the financial year 2000,

(d) by one-half, in so far as it is corporation tax charged on profits which under section 26(3) are apportioned to the financial year 2001,

(e) by three-eighths, in so far as it is corporation tax charged on profits which under section 26(3) are apportioned to the financial year 2002, and

(f) by one-fifth, in so far as it is corporation tax charged on profits which under section 26(3) are apportioned to the financial year 2003 or any subsequent financial year,

and the corporation tax referable to the income from the sale of those goods shall be such an amount as bears to the part of the relevant corporation tax charged on profits which under section 26(3) are apportioned to the financial year in question the same proportion as the income from the sale of those goods bears to the total income brought into charge to corporation tax for the relevant accounting period.”,

and

(b) by the insertion of the following after subsection (5):

“(5A) Where any part of the profits of an accounting period of a company is charged to corporation tax in accordance with section 21A, then—

(a) for the purposes of this section, the relevant corporation tax in relation to the accounting period shall be reduced by an amount determined by the formula—

R

x S

100

where—

R   is the rate per cent specified in section 21A(3) in relation to the accounting period, and

S   is an amount equal to so much of the profits of the company for the accounting period as are charged to tax in accordance with section 21A.

and

(b) notwithstanding section 4(4)(b), the income of a company, referred to in the expression ‘total income brought into charge to corporation tax’, for the accounting period for the purposes of subsection (2) shall be the sum determined by section 4(4)(b) for that period reduced—

(i) in accordance with sections 454 and 455, and

(ii) by an amount equal to so much of the profits of the company for the accounting period as are charged to tax in accordance with section 21A.”.

2. In Schedule 32—

(a) in paragraph 5—

(i) in subparagraph (2)—

(I) for the definition of “S” in clause (i)(I) there shall be substituted the following:

“S is—

(A) as respects accounting periods beginning on or after the 1st day of January, 1998, and before the 1st day of January, 1999, 16/11, and

(B) as respects accounting periods beginning on or after the 1st day of January, 1999, and before the 6th day of April, 1999, 14/9,”,

and

(II) for the definition of “S” in clause (ii) there shall be substituted the following:

“S is—

(I) as respects accounting periods beginning on or after the 1st day of January, 1998, and before the 1st day of January, 1999, 5/11, and

(II) as respects accounting periods beginning on or after the 1st day of January, 1999, and before the 6th day of April, 1999, 5/9.”,

and

(ii) in subparagraph (3), for clause (a) there shall be substituted the following clause:

(a) For the purposes of subparagraph (2)—

(i) where an accounting period begins before the 1st day of January, 1998, and ends on or after that day, it shall be divided into one part beginning on the day on which the accounting period begins and ending on the 31st day of December, 1997, and another part beginning on the 1st day of January, 1998, and ending on the day on which the accounting period ends, and both parts shall be treated as if they were separate accounting periods,

(ii) where an accounting period begins before the 1st day of January, 1999, and ends on or after that day but before the 6th day of April, 1999, it shall be divided into one part beginning on the day on which the accounting period begins and ending on the 31st day of December, 1998, and another part beginning on the 1st day of January, 1999, and ending on the day on which the accounting period ends, and both parts shall be treated as if they were separate accounting periods,

(iii) where an accounting period begins before the 1st day of January, 1999, and ends on or after the 6th day of April, 1999, it shall be divided into three parts, one part beginning on the day on which the accounting period begins and ending on the 31st day of December, 1998, another part beginning on the 1st day of January, 1999, and ending on the 5th day of April, 1999, and another part beginning on the 6th day of April, 1999, and ending on the day on which the accounting period ends, and each part shall be treated as if it were a separate accounting period, and

(iv) where an accounting period begins on or after the 1st day of January, 1999, and ends on or after the 6th day of April, 1999, it shall be divided into two parts, one part beginning on the day on which the accounting period begins and ending on the 5th day of April, 1999, and another part beginning on the 6th day of April, 1999, and ending on the day on which the accounting period ends, and both parts shall be treated as if they were separate accounting periods.”,

(b) paragraph 5 shall be deleted with effect from the 6th day of April, 1999,

(c) in paragraph 6—

(i) in subparagraph (2) for the definition of “S” in clause (ii) there shall be substituted the following:

“S has the same meaning as in paragraph 5(2)(ii)”,

and

(ii) in subparagraph (3) for clause (a) there shall be substituted the following clause:

“(a) Subparagraph (3)(a) of paragraph 5 shall apply for the purposes of subparagraph (2) as it applies for the purposes of subparagraph (2) of that paragraph.”,

(d) paragraph 6 shall be deleted with effect from the 6th day of April, 1999,

(e) in paragraph 16—

(i) in subparagraph (3) for clauses (a) to (c) there shall be substituted the following clauses:

“(a) as respects accounting periods beginning on or after the 1st day of January, 1998, and ending before the 1st day of January, 1999, 17 per cent,

(b) as respects accounting periods beginning on or after the 1st day of January, 1999, and ending before the 1st day of January, 2000, 13 per cent,

(c) as respects accounting periods beginning on or after the 1st day of January, 2000, and ending before the 1st day of January, 2001, 9 per cent,

(d) as respects accounting periods beginning on or after the 1st day of January, 2001, and ending before the 1st day of January, 2002, 5 per cent, and

(e) as respects accounting periods beginning on or after the 1st day of January, 2002, and ending before the 1st day of January, 2003, 1 per cent;”,

and

(ii) for subparagraph (5) there shall be substituted the following subparagraphs:

“(5) Relief shall not be allowed under this paragraph against corporation tax payable by a company in respect of accounting periods beginning on or after the 1st day of January, 2003.

(6) For the purposes of this paragraph, where an accounting period begins before the 1st day of January of a financial year and ends on or after that day, it shall be divided into two parts, one part beginning on the day on which the accounting period begins and ending on the 31st day of December of the preceding financial year, and another part beginning on the 1st day of January of the financial year and ending on the day on which the accounting period ends, and both parts shall be treated as if they were separate accounting periods.”,

and

(f) in paragraph 18—

(i) in subparagraph (4)—

(I) for the definition of “B” in clause (b) there shall be substituted the following:

“B is an amount determined by applying a rate equal to—

(a) as respects accounting periods beginning on or after the 1st day of January, 1998, and ending before the 1st day of January, 1999, 17 per cent,

(b) as respects accounting periods beginning on or after the 1st day of January, 1999, and ending before the 1st day of January, 2000, 13 per cent,

(c) as respects accounting periods beginning on or after the 1st day of January, 2000, and ending before the 1st day of January, 2001, 9 per cent,

(d) as respects accounting periods beginning on or after the 1st day of January, 2001, and ending before the 1st day of January, 2002, 5 per cent, and

(e) as respects accounting periods beginning on or after the 1st day of January, 2002, and ending before the 1st day of January, 2003, 1 per cent, to the amount of the company's income for the accounting period,”,

(II) for the definition of “D” in clause (b) there shall be substituted the following:

“D is an amount determined by applying a rate equal to—

(a) as respects accounting periods beginning on or after the 1st day of January, 1998, and ending before the 1st day of January, 1999, 17 per cent,

(b) as respects accounting periods beginning on or after the 1st day of January, 1999, and ending before the 1st day of January, 2000, 13 per cent,

(c) as respects accounting periods beginning on or after the 1st day of January, 2000, and ending before the 1st day of January, 2001, 9 per cent,

(d) as respects accounting periods beginning on or after the 1st day of January, 2001, and ending before the 1st day of January, 2002, 5 per cent, and

(e) as respects accounting periods beginning on or after the 1st day of January, 2002, and ending before the 1st day of January, 2003, 1 per cent,

to the amount of the company's income for the accounting period as reduced by the appropriate amount.”,

(III) after clause (b) there shall be inserted the following clause:

“(bb) Subject to clause (c), relief for any accounting period beginning on or after the 1st day of January, 2003, shall be an amount determined by the formula—

A — B

where—

A   is the amount of corporation tax which, apart from this paragraph and section 448, is chargeable for the accounting period, and

B   is the amount of corporation tax which, apart from this paragraph and section 448, would be chargeable for the accounting period if the amount of the company's income for the accounting period were reduced by the appropriate amount.”,

(IV) in clause (c), for “Notwithstanding clause (b)” there shall be substituted “Notwithstanding clauses (b) and (bb)”,

and

(ii) in subparagraph (6) for clause (a) there shall be substituted the following clause:

“(a) Subparagraph (6) of paragraph 16 shall apply for the purposes of this paragraph as it applies for the purposes of that paragraph.”.