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HMRC internal manual

Company Taxation Manual

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HM Revenue & Customs
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ACT collection: items included in error

ICTA88/SCH13/PARA8

Schedule 13 was repealed in relation to return periods and accounting periods beginning on or after 6 April 1999.

You may occasionally find that an item has been included in a return under Schedule 13 and it should have been included in a return made under ICTA88/SCH16 (CTM35100 onwards). If you do, you need to make sure that the tax liabilities (including interest on unpaid tax) of the company or of any other person are the same as they would have been if the item had been shown on the correct return.

You are empowered to make such assessments, adjustments or set-offs as are required to correct the tax position.

Example

A company has recorded a payment of interest as a franked payment. It is later discovered that the interest is not a distribution. You would need to take the following action.

  1. Repay ACT paid in respect of that payment.
  2. If franked investment income was used to cover the payment, that franked investment income will be available for set off against any other franked payments made by the company and this may result in the repayment of ACT paid on those franked payments.
  3. The company may be liable to account for IT on the interest and that interest may result in an adjustment to the profits chargeable to CT and thus the CT liability.
  4. The tax liability of the recipient of the payment may need adjustment.

You can make these adjustments by virtue of ICTA88/SCH16/PARA8.

The due and payable date for tax due under any assessment made under these provisions is the date on which the tax would have been due if the returns had been correctly completed.