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HMRC internal manual

Company Taxation Manual

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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 4

Accounting period 1.1.94 to 31.12.94   Accounting period 1.1.96 to 31.12.96
     
CT profits £10,000 Trade loss £10,000
Non-trade charges    
Nil tax payable £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.)
Liability after carry-back becomes profit £10,000
   
Less loss carry-back £10,000
CT liability Nil

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.