Corporation Tax Act 2010 section 357RC

Northern Ireland supplementary deduction: amount

Section 357RC provides the formula for calculating the Northern Ireland supplementary deduction, with different approaches depending on whether the accounting period falls within one or more financial years.

• Where the accounting period falls within a single financial year, the supplementary deduction is calculated as (A − B) × ((MR − NIR) / NIR), using the Northern Ireland additional deduction, surrendered losses, and the relevant tax rates.
• A is the Northern Ireland additional deduction for the period; B is Northern Ireland losses surrendered under section 1201 of CTA 2009; MR is the main corporation tax rate; and NIR is the Northern Ireland rate.
• Where the accounting period straddles more than one financial year, the deduction is calculated separately for each financial year as if the period fell entirely within that year, then time-apportioned and added together.
• The three-step process for straddling periods ensures the correct rates are applied proportionately where the main rate or Northern Ireland rate changes between financial years.