Taxes Management Act 1970 section 109C

Penalty for company's failure to comply with section 109B

Section 109C imposes a penalty on a company that ceases to be UK resident without first meeting all four conditions set out in section 109B for securing payment of outstanding tax.

• A company that leaves the UK before satisfying all four conditions (A to D) in section 109B faces a penalty.
• The penalty cannot exceed the total tax that is, or will become, payable for periods beginning before the company ceased to be UK resident.
• Only tax that remains unpaid at the time the company ceases to be UK resident is taken into account when calculating the maximum penalty.
• The provision acts as a safeguard to ensure departing companies settle their outstanding UK tax liabilities before leaving.