What is the default method of apportionment under section 1311 of the Corporation Tax Act 2009?

Section 1311 provides that where the Corporation Tax Acts require an amount to be apportioned to different periods, the default method is a time basis using a day count. The amount is divided proportionally according to the number of days falling in each respective period, ensuring a straightforward and consistent approach.

When does the time-based apportionment under section 1311 not apply?

The time-based day-count apportionment under section 1311 does not apply when another provision within the Corporation Tax Acts specifically requires or permits a different method of apportionment. In such cases, that alternative provision takes priority over the default rule, and the company must use the method specified by that other provision.

How is apportionment calculated in practice when a company changes its accounting date?

When a company changes its accounting date creating a long period of account, it is split into accounting periods for corporation tax. Under section 1311, amounts are apportioned by calculating the proportion of days in each period relative to the total days. For example, an expense of £45,600 over 456 days would be split proportionally between the resulting periods.

Why is section 1311 of the Corporation Tax Act 2009 important for corporation tax computations?

Section 1311 is important because it provides a default mechanism ensuring consistency and simplicity when splitting income, expenses, or other amounts across accounting periods. Without this rule, there would be no standard approach for dividing amounts between periods, potentially leading to disputes and inconsistencies in corporation tax computations across different companies.

Corporation Tax Act 2009 section 1311

Apportionment to different periods

Section 1311 sets out the rules for how amounts should be apportioned when they need to be split across different periods for corporation tax purposes.

Where any provision of the Corporation Tax Acts requires an amount to be apportioned to different periods, the apportionment is made on a time basis according to the number of days in each period.
This time-based apportionment applies unless a different method of apportionment is specifically required or permitted by another provision.
The rule provides a default mechanism so that, in the absence of any special direction, a simple day-count approach is used to divide amounts between periods.
This ensures consistency and simplicity when splitting income, expenses or other amounts across accounting periods or other relevant time intervals.

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