Taxes Management Act 1970 section 59F

Arrangements for paying tax on behalf of group members

Section 59F allows HMRC to agree arrangements whereby one company in a group can pay corporation tax (and certain other charges treated as corporation tax) on behalf of some or all other group members.

• HMRC may agree arrangements with some or all members of a corporate group for one member to pay corporation tax on behalf of the others for specified accounting periods.
• A group comprises a parent company and all its 51% subsidiaries, including indirect 51% subsidiaries at any level down the chain.
• The arrangements can cover interest, penalties, and certain charges treated as corporation tax — including loans to participators, CFC charges, the bank levy, residential property developer tax, the energy profits levy, and the electricity generator levy.
• The arrangements do not alter the underlying tax liability of any individual group company — each company remains legally liable for its own corporation tax and other obligations under the Tax Acts.