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HMRC internal manual

Company Taxation Manual

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

Accounting period 1.1.94 to 31.12.94 Accounting period 1.1.96 to 31.12.96
CT profit £80,000, CT liability £20,000 Trade loss £20,000
Paid £20,000 on due date 1.10.95 ICTA88/S393A claim to carry back to accounting period ended 31.12.94. (No profits for the accounting period ended 31.12.95)
Liability for accounting period ended 31.12.94 reduced to profit £80,000
Less loss carry-back £20,000
Profit chargeable to tax * * *


  Tax @ 25% £15,000

£5,000 tax is repaid on 01.07.97.

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.