Corporation Tax Act 2009 section 127

Further assessment etc. if herd basis rules apply

Section 127 deals with what happens when a herd basis election is made after a tax assessment for the relevant accounting period has already been finalised, ensuring that the correct tax position can still be achieved through further assessment or repayment.

• Where the herd basis rules apply to an accounting period whose assessment is already final, HMRC must make any further assessment needed to give effect to those rules.
• Any overpaid tax resulting from the application of the herd basis must be repaid to the company.
• A repayment of tax will only be made if the company submits a formal claim for it.
• This ensures that a late herd basis election does not prevent the company from receiving the correct tax treatment for its farming profits.