Corporation Tax Act 2010 section 968

Deductions from payments received by non-UK resident companies

Section 968 explains how income tax that has already been deducted at source from payments received by non-UK resident companies can be set off against the corporation tax those companies owe.

• Where a non-UK resident company receives a payment from which income tax has already been deducted, and that payment forms part of its income chargeable to corporation tax, the income tax deducted can be set off against corporation tax.
• The set-off applies against the corporation tax assessable on that same income for the accounting period in which the payment is brought into account for corporation tax purposes.
• This ensures that the non-UK resident company is not taxed twice on the same income — once through income tax deduction and again through a corporation tax charge.
• The provision applies only where the payment is within the charge to corporation tax, meaning it must form part of, or be taken into account in calculating, the company's corporation tax liability.