What does section 104 of the Corporation Tax Act 2009 do?

Section 104 ensures that repayments received by a company under the Financial Services and Markets Act 2000 (FISMA 2000) are treated as taxable trading receipts. It provides a backstop so that even repayments which might not otherwise qualify as trading receipts are brought into the trading profit calculation for corporation tax purposes.

Which FISMA 2000 repayment provisions are covered by section 104?

Section 104 covers repayments made under section 136(7) or section 214(1)(e) of FISMA 2000, together with refunds of fees arising under the scheme rules referred to in paragraph 14(1) of Schedule 17 to FISMA 2000. These are collectively defined in the legislation as the repayment provisions.

How does section 104 relate to section 92 of the Corporation Tax Act 2009?

Section 92 allows FISMA levies and similar charges paid by companies to be deducted as trading expenses, while section 104 ensures repayments of those levies are taxed as trading receipts. Together these provisions create symmetrical tax treatment of both outgoing levies and incoming repayments connected with FISMA 2000.

Can you give an example of how section 104 applies in practice?

If a financial services company pays an annual levy under FISMA 2000 and later receives a £10,000 refund because the levy was overstated, section 104 requires the company to include that £10,000 as a trading receipt in its corporation tax computation for the period in which the repayment is received.

Corporation Tax Act 2009 section 104

Repayments under FISMA 2000

Section 104 ensures that repayments received by a company under the Financial Services and Markets Act 2000 (FISMA 2000) are treated as taxable trading receipts.

Repayments received under FISMA 2000 must be included as trading receipts when calculating a company's trading profits.
The repayments covered include those arising under section 136(7) or section 214(1)(e) of FISMA 2000, as well as refunds of fees under the scheme rules in Schedule 17 to FISMA 2000.
Most FISMA repayments would normally be taxable under standard trading profit rules, but this section exists as a backstop to catch any that might otherwise fall outside the trading receipts definition.
A related provision in section 92 deals with the opposite scenario, covering the deductibility of FISMA levies and similar payments made by companies.

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