From April 2021, the legislation applies to the private sector where the end user is not 'small' as defined by the legislation. This is set out in ITEPA 2003, ss 60A–60G as inserted by FA 2020, Sch 1, paras 1, 5 A comparable NIC provision was introduced in SI 2000/727, reg 5A. This consists of a number of tests. The first question is to assess which period we look at when applying those tests. For commentary on the rules, see 'Growing and shrinking pains' by Emma Rawson in Taxation, 23 April 2020, 14.
Which period are the tests applied to?
For a company, its first financial year is always treated as small and so the tests do not need to be applied1. For all other years, take the accounting period for filing the company's accounts and reports for the financial year that ends before the start of the tax year. This is referred to in the legislation as the 'financial year that is relevant to the tax year'. The
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