CTM97420 - CTSA: group payment arrangements: companies eligible

The definition of ‘group’ for group payment arrangement purposes is broader than the normal group relationship required for a surrender of a repayment under CTA10/S963, or for group relief, for example. Companies eligible to enter into a group payment arrangement together are:

• a parent company,

and

• its 51% subsidiaries,

and

• the 51% subsidiaries of those subsidiaries, and so on.

Note:

• Companies covered by a group payment arrangement are ‘participating companies’.
• The company chosen by the group to make payments on behalf of the participating companies is the ‘nominated company’.

The following criteria are also relevant when a group applies to enter into a group payment arrangement:

• When a group makes an arrangement it must have grounds for believing that at least one of the participating companies will be a quarterly instalment payer for the period covered by the arrangement.
• The nominated company must be resident in the UK. Note: This requirement does not apply to the other participating companies.
• UK subsidiaries of overseas companies and UK branches of non-resident companies can come within an arrangement.
• Companies qualify even though their 51% connection to the rest of the group is through an overseas parent.
• Not all members of the group need be covered by the group payment arrangement.
• A group may apply to set up more than one arrangement for different sub-sets of companies in the group.
• Generally, the participating companies have to make up accounts to the same date as the nominated company.

A copy of the contract is at CTM97430.

A copy of the notes that accompany the contract is at CTM97440.