Corporation Tax Act 2009 section 1179CF

Priority of discharge

Section 1179CF establishes the order in which different types of audio-visual expenditure credit amounts must be applied when discharging a company's corporation tax liability for an accounting period.

• When a company has both notional tax deduction amounts and expenditure credit redemption amounts available to set against the same corporation tax liability, there is a mandatory ordering rule.
• Amounts arising from the notional tax deduction (under section 1179CD) — whether used directly or surrendered to group companies — must be applied first against the corporation tax liability.
• Amounts arising from the redemption of the expenditure credit (under section 1179CC) — whether used directly or surrendered to group companies — can only be applied after the notional tax deduction amounts have been fully used.
• This priority rule ensures a consistent and prescribed sequence of set-off, preventing companies from choosing to apply expenditure credit redemption amounts ahead of notional tax deduction amounts against the same liability.