MTT33100 - Calculating top-up amounts: Additional top-up amounts: Additional top-up amount where covered taxes are less than expected
Source: gov.uk (2025-08-05)


An additional top-up amount arises for the standard members of a group in a territory where:
- the members have a collective loss for the period when their adjusted profits are aggregated,
- those members have a combined covered tax balance that is less than nil, and
- that covered tax balance (when expressed as a positive figure) is greater than the expected covered tax amount.
The ‘expected covered tax amount’ is the collective loss (expressed as a positive figure) multiplied by 15%.

The additional top-up amount that arises is the difference between:
- the expected covered tax amount, and
- the combined covered tax balance.
The additional top-up amount is a collective additional amount.

A QDT credit will apply to the collective additional amount where the members accrue QDMTT in the current period.

The collective additional amount will then be allocated between members (see MTT33110 (https://www.gov.uk/hmrc-internal-manuals/multinational-top-up-tax-and-domestic-top-up-tax/mtt33110)).

This is set out in section 203 of Finance (No.2) Act 2023.

Election to carry forward collective additional amount

The collective additional amount can be carried forward to a period where there is an adjusted profit for the territory (see MTT33120 (https://www.gov.uk/hmrc-internal-manuals/multinational-top-up-tax-and-domestic-top-up-tax/mtt33120)).

Example

A1 Group is a group with members located in Territory A. In the 2024 period, the standard members in Territory A have a collective loss of £20 million for their adjusted profits, and a combined covered tax balance of negative £5 million.

An additional top-up amount arises for the members of A1 Group in Territory A because:
- those members have a collective loss,
- their combined covered tax balance is less than nil, and
- that balance expressed as a positive figure (£5m) is greater than 15% of the expected covered tax amount (15% of £20m = £3m).
The value of the collective additional amount is the difference between:
- the expected covered tax amount of £3 million, and
- the combined covered tax balance of £5 million.
Therefore, the collective additional amount for the members for the 2024 period is £2 million.

QDT crediting

The members of the subgroup in the current period may be charged QDMTT for the collective additional amount. These amounts are credited against the collective additional amount for MTT purposes. For DTT purposes, there will be no QDT credit.

Where those members have another collective additional amount, the QDMTT accrued may need to be apportioned to determine the QDT credit applicable.

Note that different rules apply for QDT credits for a collective additional amount arising following a recalculation.

QDT crediting - Single collective additional amount

The collective additional amount will be reduced by the QDMTT amounts accrued, but not below nil.

QDT crediting - Two collective additional amounts

Where:
- there are two collective additional amounts, and
- the sum of both those amounts is less than or equal to the value of the QDMTT amounts accrued,
the collective additional amount arising due to covered taxes being less than expected will be reduced to nil.

Where the sum of both the collective additional amounts exceeds the value of the QDMTT amounts accrued, the QDT credit to be applied to the collective additional amount arising due to covered taxes being less than expected is determined by the following process:

Step 1: Divide:
- the value of the collective additional amount arising due to covered taxes being less than expected,
by
- the sum of both collective additional amounts.
Step 2: Multiply the result of Step 1 by the value of the QDMTT amounts.

Step 3: Reduce the collective additional amount arising due to covered taxes being less than expected by the result of Step 2.

Example

The standard members in Territory A have a collective additional amount arising following recalculations of £1000 and a collective additional amount arising due to covered taxes being less than expected of £500.

Those standard members have accrued amounts of QDMTT arising in the present period of £1350.

To determine the QDT credit to be applied to the collective additional amount arising due to covered taxes being less than expected:

Step 1: Divide £500 by (£1000 + £500 =) £1500 = 1/3

Step 2: Multiply the value of the QDMTT amounts by 1/3 (£1350 * 1/3 = £450)

Step 3: Reduce the collective additional amount of £500 by £450.

The collective additional amount arising due to covered taxes being less than expected is therefore reduced to £50 by the QDT credit.