advance corporation tax

advance corporation tax (ACT) An advance payment of corporation tax. It is paid when a company makes a qualifying distribution. For the financial year 1 April 1995 to 31 March 1996 ACT is calculated at a rate of 20/80 dividend paid. The ACT is due for payment 14 days after the return period in which the dividend is paid. ACT paid in an accounting period can be set against the gross corporation tax due for the period, up to the maximum set-off of 20% of total profits.