Group payment arrangements

Produced by Tolley in partnership with Jackie Barker of Wells Associates

The following Corporation Tax guidance note Produced by Tolley in partnership with Jackie Barker of Wells Associates provides comprehensive and up to date tax information covering:

  • Group payment arrangements
  • Definition of group for group payment arrangements
  • Applying for group payment arrangements
  • Amendment or termination of a group payment arrangement
  • Making payments under a group payment arrangement
  • Operation of group payment arrangements
  • Change in contact details of companies in a GPA

Group payment arrangements

Each individual company is usually responsible for the payment of its own corporation tax liability. However, group payment arrangements (or GPAs) allow companies belonging to the same group to make payments of corporation tax jointly. The company that makes all the payments of corporation tax on behalf of the group is called the ‘nominated company’ and effectively acts as the group ‘bank’. All other members are called ‘participating companies’.

Entering into these arrangements is optional but the advantage is that only one payment of corporation tax needs to be made on behalf of all the group members. This means that the administration is much more straightforward, particularly in the context of quarterly instalment payments of corporation tax. Such an arrangement also avoids the complications of having to deal with offsetting group members’ corporation tax overpayments against other members’ underpayments. Finally, entering into a group payment arrangement can help to minimise interest costs arising on late payment of tax, assuming the nominated company makes payments on time.

See Simon’s Taxes D1.1321 for more details.

Definition of group for group payment arrangements

The definition of a group for group payment arrangements is wider than that used for other purposes such as group relief.

Groups that are eligible to participate in these arrangements are parent companies, its 51% subsidiaries, the 51% subsidiaries of those subsidiaries, and so on.

There are also various other conditions that must be met which include the following:

  1. at least one company in the group must be large or very large and therefore liable to quarterly instalment payments. See the QIPs ― when do they apply guidance note

  2. it is a condition of the contract that the nominated company must be UK resident but there is no requirement for any of the other companies within the arrangement to be UK resident. However, HMRC has confirmed it will consider requests where the nominated company is resident in the EU

  3. each member of the group must be a

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