Corporation Tax self-assessment (CTSA): the payment obligation: carry-back of trading losses or non-trading deficit - late payment interest - example 3
|Accounting period 01/01/2008 to 31/12/2008||Accounting period 01/01/2010 to 31/12/2010|
|CT profit||£40,000||Trade loss £20,000|
|CT liability||£10,000||CTA2010/S37 claim, as extended by FA09/Sch 6, to carry back to accounting period ended 31/12/2008. (No profits for the accounting period ended 31/12/2009.)|
|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||£20,000|
|Tax @ 25%||£ 5,000|
The £2,000 CT paid is repayable.
The carry-back has no consequences for late payment interest. Although the DTR has been displaced by a carry back of losses with a later effective date of payment, no additional amount of CT would have carried interest if the claim had not been made. However, COTAX will incorrectly charge interest in such a case. See COM50090 for the action to take.