CT600I is the supplementary page of the Company Tax Return for companies with a ring fence trade: extracting oil or gas, or holding oil rights, in the UK or on the UK continental shelf. The profits of that trade are taxed at their own rates of Corporation Tax and bear a supplementary charge on top. This guide explains when the page is needed, how the tax is worked out, how to complete the page in Tax Optimiser, and what each box from I1 to I160 means.
When a company needs a CT600I
File a CT600I, and tick box 135 on the CT600, if the company carried on a ring fence trade in the period. The page is needed even in a year when the trade made a loss, because the loss is reported on it.
A company with no oil or gas extraction activities does not file the page.
How ring fence profits are taxed
Ring fence profits are kept apart from the company’s other profits, which is where the name comes from. Two taxes apply to them.
Ring fence Corporation Tax
Ring fence profits are charged to Corporation Tax at their own rates rather than the standard ones:
| Augmented profits of the company | Rate on ring fence profits |
|---|---|
| Up to the lower limit (£50,000) | 19% — the small ring fence profits rate |
| Between the limits | 30% less marginal relief at 11/400 |
| Above the upper limit (£250,000) | 30% — the main ring fence profits rate |
The limits are shared between associated companies and reduced for a short period, in the same way as for the standard rates. For example, a company with £150,000 of profits, all ring fence, pays £45,000 at 30% less marginal relief of 11/400 × (£250,000 − £150,000) = £2,750.
If the company also has other profits, each kind is taxed at its own rate and takes marginal relief on its own share. The CT600 then shows two rows for each financial year: one for the other profits and one for the ring fence profits.
The supplementary charge
The supplementary charge is an extra 10% of the ring fence profits, for accounting periods beginning on or after 1 January 2016. It is worked out on a slightly different figure from the Corporation Tax: financing costs are added back, and losses and certain allowances are taken off. Boxes I5 to I70 of the CT600I carry out that calculation.
Completing the CT600I in Tax Optimiser
Open the period’s Corp Tax Calculations workspace and choose Ring Fence Trade in the Sections menu. If the period of account is longer than 12 months it is filed as two returns, each with its own CT600I; use the Return 1 and Return 2 buttons to switch between them and enter the figures for each return.
Step 1 — Say that the page applies
Tick The company carried on a ring fence trade in this period. This is what attaches the CT600I to the return.
Step 2 — Enter the ring fence profits chargeable
Enter the part of the company’s profits chargeable to Corporation Tax that comes from the ring fence trade. This is box 320 of the CT600. Tax Optimiser charges that amount at the ring fence rates and the rest of the profits at the standard rates. It cannot be more than the profits chargeable in box 315.
The ring fence trade itself stays in the accounts and the trading sections in the usual way; this figure only says how much of the taxable profit is ring fence.
Step 3 — Enter the supplementary charge figures
Enter the ring fence profit or loss in I5 (a loss as a negative figure), the financing costs in I20 and I25, and any losses, decommissioning amounts and field allowance in I40 to I60. Tax Optimiser works out the totals in I30, I35, I45 and I65 and the charge in I70.
Step 4 — Enter any deductions against the tax
Boxes I80 and I85 show the ring fence Corporation Tax and the supplementary charge net of any deductions given in terms of tax, such as double taxation relief. Enter those deductions if there are any; otherwise leave them at nil.
Step 5 — Record any transferred tax history
If the company has made an election to transfer tax history, tick the election boxes that apply and click Add asset for each asset acquired. Enter the tracking figures for the asset; the carried forward and total columns are worked out for you.
Step 6 — Save and check the return
Click Save. Once the page applies, Tax Optimiser:
- ticks box 135 on the CT600;
- files the ring fence profits in box 320 and charges them at the ring fence rates in the financial year rows, with any marginal relief in box 435;
- carries the charge in I70 to box 505, and from there into the tax chargeable and the tax payable;
- carries I80 and I85 to boxes 585 and 590;
- files the CT600I with the return and adds a Ring fence trades page to the computation;
- lists the completed form under Supplementary pages on the CT600 Document card, where you can view or download it.
To remove the page, clear the first tick and save.
CT600I box by box
Boxes I1 to I4 — Company information
The company name, tax reference and the period covered by the page. Tax Optimiser copies them from the return; the period cannot exceed 12 months.
CT600 box 320 — Ring fence profits included
Not a box on the CT600I, but entered on the same screen: the ring fence profits included in the profits chargeable to Corporation Tax. It decides how much of the profit is taxed at the ring fence rates.
Boxes I5, I10 and I15 — Ring fence profits or losses of the ring fence trade
The profit or loss of the ring fence trade after any group relief surrendered, but before losses brought forward or carried back. An ‘X’ goes in I10 for a profit or I15 for a loss; Tax Optimiser ticks the right one from the sign of the figure you enter.
Boxes I20 and I25 — Disallowed financing costs
Financing costs deducted in arriving at I5, which are left out of account for the supplementary charge: interest and other costs of debt, exchange gains and losses on debt, debits and credits on derivative contracts, and the finance cost of leases. I20 is for the company’s own costs and I25 for those in loss relief surrendered to it.
Box I30 — Total disallowed finance costs
I20 plus I25. Calculated automatically.
Box I35 — Adjusted ring fence profits
A profit in I5 plus I30. Where I5 is a loss, the amount by which I30 is more than the loss, or nil. Calculated automatically.
Box I40 — Decommissioning adjustment
An increase in the profits where decommissioning expenditure has reduced them. It only applies when the rate of the supplementary charge is more than 20%, so it is nil for periods from 2015.
Box I45 — Revised ring fence profits
I35 plus I40. Calculated automatically.
Box I50 — Losses brought forward or from a later accounting period
Ring fence losses set against the profits, worked out leaving financing costs out of account. It cannot be more than I35.
Box I55 — Decommissioning reduction
Relief where decommissioning has reduced a Petroleum Revenue Tax liability. Like I40, it only applies when the rate of the charge is more than 20%.
Box I60 — Field allowance
Allowances activated against the supplementary charge: field allowance, onshore allowance, cluster area allowance and investment allowance. It cannot reduce I65 below nil.
Box I65 — Net profits subject to ring fence charge
I45 less I50, I55 and I60. Calculated automatically.
Box I70 — Tax at supplementary charge rate
I65 at 10%. For a period beginning in 2015 the rate is 20%, and a period that runs across 1 January 2016 is split by days. Calculated automatically and copied to box 505 of the CT600.
Box I75 — Ring fence trade losses arising in period
The loss of the period with financing costs left out of account. Tax Optimiser uses the loss in I5 less the financing costs in I20; enter a different figure if the company’s computation gives one.
Box I80 — Ring fence Corporation Tax
The Corporation Tax on the ring fence profits, after marginal relief and net of any deductions in terms of tax. Copied to box 585 of the CT600.
Box I85 — Supplementary charge tax
The supplementary charge in I70 net of any deductions in terms of tax. Copied to box 590 of the CT600.
Boxes I90 to I105 — Elections to transfer tax history
An ‘X’ for each kind of election the company has made: on acquiring assets in this period (I90), on disposing of assets in this period (I95), on acquiring assets in an earlier period (I100) and on disposing of assets in an earlier period (I105). The buyer and seller of an oil licence interest make the election together, so that the buyer can set decommissioning losses against some of the seller’s tax history.
Boxes I110 and I115 — Description and reference of the asset
The name of the acquired field (I110) and the asset reference HMRC gave when the election was agreed (I115): six letters followed by three digits. Each asset has its own set of boxes I110 to I160.
Boxes I120 and I125 — Cessation of production and tracking certification
An ‘X’ in I120 if the Oil and Gas Authority has approved the cessation of production for the asset, and in I125 if the senior tracking officer’s certification of the tracked profits is qualified.
Box I130 — Detailed schedule included
An ‘X’ if a detailed schedule of the accounting periods and rates is included in the tax computations. One is needed when transferred tax history has been activated, used or sold.
Boxes I135 and I140 — Transferred tax history
The profits and tax of the transferred history, for ring fence Corporation Tax (I135) and the supplementary charge (I140): the amount brought forward or acquired (A), transferred on a disposal (B), used this period (C) and carried forward (D). D is A less B and C, calculated automatically.
Box I145 — Tracked profits or losses
The profits and losses of the asset since it was acquired: the balance brought forward (A), the profit or loss of this period (B), other adjustments (C) and the amount carried forward (D), calculated automatically. Enter a loss as a negative figure.
Box I150 — Decommissioning expenditure
The decommissioning expenditure on the asset: the balance brought forward (A), the expenditure of this period (B), other adjustments (C) and the amount carried forward (D), calculated automatically. Transferred tax history is activated once this expenditure is more than the tracked profits.
Boxes I155 and I160 — Activated transferred tax history
The history that has been activated, for ring fence Corporation Tax (I155) and the supplementary charge (I160): previously activated (A), activated this period (B), the total (C, calculated automatically) and the amount used against losses (D).
The printed form holds one asset. If the company has more, Tax Optimiser adds a further page for each.
What Tax Optimiser does not do
Tax Optimiser does not work out the ring fence profit or loss from the accounts, decide which activities fall inside the ring fence, or calculate the field, investment and other allowances; you enter those figures. It does not calculate the Energy Profits Levy (boxes 501 and 986 to 989) or Petroleum Revenue Tax, and it does not make or track a transferred tax history election beyond recording the figures. These are judgements for the company and its advisers.
Common questions
What is the CT600I?
The CT600I is the supplementary page of the Company Tax Return for companies with a ring fence trade. It works out the supplementary charge on the ring fence profits and records any transferred tax history. Box 135 on the CT600 is ticked to show it is attached.
Who has to complete a CT600I?
A company that extracts oil or gas, or holds oil rights, in the UK or on the UK continental shelf, for each accounting period in which it carries on that trade.
What is the rate of the supplementary charge?
10% of the adjusted ring fence profits, for accounting periods beginning on or after 1 January 2016. It was 20% for periods beginning in 2015.
What rate of Corporation Tax applies to ring fence profits?
30%, the main ring fence profits rate, or 19%, the small ring fence profits rate, where the company’s profits are within the lower limit. Between the limits the 30% rate is reduced by marginal relief at 11/400.
Where does the supplementary charge go on the CT600?
Box I70 on the CT600I is copied to box 505 on the CT600, where it is added to the tax chargeable in box 510.
Why are financing costs added back?
The supplementary charge is worked out as if financing costs had not been deducted, so that the charge cannot be reduced by funding the trade with debt. They are still deductible for Corporation Tax.
Do I file a CT600I if the ring fence trade made a loss?
Yes. Enter the loss as a negative figure in I5; the page then shows the loss arising in I75 and no charge in I70.
Where to go next
- Corporation Tax in Tax Optimiser — the full journey from trial balance to filed return.
- CT600 box-by-box guide — boxes 320, 505, 585 and 590 and the supplementary page boxes on the main return.
- HMRC’s CT600I guidance — the official notes for the page.