A restriction placed on the availability of foreign tax credits by operation of the formula: (D+U) x M% where D is the dividend, U is the foreign tax attributable to that dividend and M is the maximum relievable UK corporation tax (currently 19%). The effect of the mixer cap is that creditable foreign tax will always be restricted to 19% of the dividend (net of any withholding tax) received by the UK company.

As a result of the introduction of the mixer cap in the Finance Act 2000 the use of offshore mixer companies to increase the amount of foreign tax for which credit is allowed against UK tax of the dividend received by the UK company was negated.