IRIS Business Tax - Non-Corporate Distributions Rate (NCDR) - FAQ

Select Edit | Non-Corporate Distributions to enter the data for non-corporate distributions.
Revenue systems are designed to take an underlying rate calculation to 2 decimal places.

To reduce rounding problems the Inland Revenue has not introducing any rounding whatsoever so:

18.99 or 18.9999999999999999 will both be 18.99%,

19.01111111 and 19.0199999999 will both be 19.01%.
Where the profit is between £49,933 and £50,000 applying the strict interpretation of the law would give a result of a higher figure for the underlying rate.

However, the practice of truncating rather than rounding the underlying rate introduces anomalous results so that the 'NCD' and 'underlying' tax calculations work out less than the profits at small companies' rate less marginal rate relief.

In this circumstance following the guidance on the CT600 means that the figure from box 65 should be used as the corporation tax chargeable.

The corporation tax computation has been enhanced to reflect this requirement.
The non-corporate distributions rate applies if the company's underlying rate of tax is less than 19%.

Check to see if any of the following could result in the company paying tax at 19% in spite of apparently low profits:

The company has a short period - then the upper and lower limits should be time apportioned.

The company has associated companies -  then the upper and lower limits should be divided by the total number of associated companies.

The company has received franked investment income - then when this is added to the basic profit does the total exceed the limits?
Select Edit | Non-Corporate Distributions and tick the 'suppress warnings' field.
If a non-corporate distribution was paid after 31st March 2006 then this does not need to be disclosed within Business Tax.