Taxes Consolidation Act 1997 section 697T

Average taxable profits for purposes of temporary solidarity contribution

Section 697T sets out the rules for determining the average taxable profits in respect of the reference years of an energy company for the purposes of calculating the temporary solidarity contribution.

• The average taxable profits are based on annual averages for the period from the commencement of relevant activities (no earlier than 2018) to the end of 2021, with any negative result deemed to be zero.
• Where relevant activities commenced part way through a calendar year, the taxable profits for that year are grossed up to an annual equivalent using a formula based on the number of months of activity.
• Where a predecessor company ceases relevant activities in 2022 or 2023 and a successor takes them over, the average taxable profits of the predecessor are apportioned on a time basis between the two companies for the year of transfer.
• Where the transfer takes place in 2022, the successor company uses the full unapportioned average taxable profits of the predecessor for the year 2023 without further adjustment.