A Corporation Tax Group Payment Arrangement (GPA) serves as a specialised framework allowing corporate groups to collectively make joint Corporation Tax payments. This arrangement streamlines administrative processes and minimises costs associated with handling numerous individual payments. The GPA also affords group members the opportunity to manage potential differential interest charges by strategically allocating payments.
Eligibility for GPA is limited to specific corporate groups, requiring a formal legal agreement. Qualified members include a parent company and its subsidiaries owning at least 51% equity. The 51% subsidiaries of these subsidiaries, and so forth, can also be included within the group. This definition is not necessarily the same as other definitions used for groups by HMRC and other government departments and agencies.
It’s important to note that a GPA doesn’t alter the fundamental responsibility of each company of its own Corporation Tax obligations. However, the nominated company within the GPA assumes responsibility for settling the Corporation Tax liabilities of all participating companies within the arrangement.
Applying for a GPA should only be considered once all conditions have been met or will be met. The application must be submitted to HMRC at least a month before the initial payment becomes due for the accounting period covered by the GPA. This is typically 6 months and 13 days following the commencement of the Corporation Tax period.
If you would like to discuss eligibility for a GPA and Corporation Tax please get in touch with your CB Reid contact.