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HMRC internal manual

Company Taxation Manual

Corporation Tax self-assessment (CTSA): the payment obligation: carry-back of trading losses or non-trading deficit - late payment interest - example 2

 

Accounting period 01/01/2008 to 31/12/2008 Accounting period 01/01/2010 to 31/12/2010
CT profit £80,000, CT liability £20,000 Trade loss £20,000
Paid £20,000 on due date 01/10/2009 CTA2010/S37, claim, as extended by FA2009/Sch 6, to carry back to accounting period ended 31/12/2008.  (No profits for the accounting period ended 31/12/2009)

 

 

Calculation  
Liability for accounting period ended 31/12/2008 reduced to profit £80,000
Less loss carry-back £20,000
Profit chargeable to tax £60,000
Tax @ 25% £15,000

£5,000 tax is repaid on 01/07/2011.

The carry-back has no consequences for late payment interest.  No additional amount of CT would have carried interest if the claim had not been made.