Corporation Tax Act 2010 section 356GB

Activation of allowance: reference periods

Section 356GB explains how to calculate the amount of onshore allowance that a company can activate against the supplementary charge for a given reference period in relation to a particular site.

• The activated allowance for a reference period is the lower of the company's relevant income from the site in that period and the total unactivated allowance attributable to that period and site.
• Relevant income for a reference period is calculated by apportioning the site's total relevant income for the accounting period using the formula I × (R / L).
• In the formula, I is the company's relevant income from the site for the whole accounting period, R is the number of days in the reference period, and L is the number of days in the accounting period during which the company held a licence in the relevant area.
• If the company has no relevant income from the site in the reference period, or no unactivated allowance attributable to it, the activated allowance is nil.