Corporate groups are facing a Christmas deadline crisis after the Inland Revenue announced they have only three days to use a new regulation allowing group relief on corporation tax.
The Revenue has come under fire after publishing details of changes to group relief which come into effect only from 29 December.
Experts have complained that this leaves only a three-day window for groups with a 31 December year end to take advantage of the new rules.
With the usual delays in the Christmas postal service commentators believe companies have been put in an impossible position. The alternative is to use the existing regime.
‘By neither having had the regulations laid in time for them to take effect, nor saying they would accept the new basis before 29 December, the Revenue has produced the worst of all worlds,’ said one commentator.
A Revenue spokesman said: ‘It took time to lay the regulations and we wanted it to go through so at least a few people could use it.’
Companies use group relief to set a loss made in one subsidiary against the tax on profits made in another. Changes were made in an attempt to simplify the procedure which failed hence the new regulations revealed on 8 December.
According to some, the new arrangement will leave companies with a dilemma.
To wait until 29 December could risk a delayed postal service holding up the paper work beyond the deadline at the end of the month. They could submit returns under the old style now and submit again under new rules, but the Revenue could ignore the second submission.
Forms to allow returns under new rules will not be available until 15 December.
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