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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 3

Accounting period 1.1.94 to 31.12.94   Accounting period 1.1.96 to 31.12.96
CT profit £40,000 Trade loss £20,000
CT liability £10,000 ICTA88/S393A claim to carry back to accounting period ended 31.12.94.  (No profits for the accounting period ended 31.12.95.)
less ACT of the accounting period £  8,000  
CT payable paid by due date £  2,000  
Liability after carry-back becomes profit £40,000
Less loss carry-back £20,000
Profit chargeable to tax * * *


  Tax @ 25% £ 5,000
  Less ACT of the accounting period £ 5,000
  Tax payable * * *



The £2,000 CT paid is repayable.

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.

Note: COTAX will incorrectly charge interest in such a case, see (b) of CTM92420.