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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: trading loss carry-back - ICTA88/S242 - repayment interest

ICTA88/S826 (7B) restricts the payment of repayment interest in connection with payments of tax credit that are generated by the carry-back of a trade loss.

Where a company claims under ICTA88/S242 and ICTA88/S393A to:

  • carry back a trading loss (other than against an accounting period falling wholly within the previous twelve months), and
  • to treat franked investment income as if it was an amount of profits,

repayment interest on any payments of tax credit resulting is only payable from the due date of the accounting period in which the loss was incurred.

(Note that Section 242 was repealed for accounting periods beginning on or after 2 July 1997.)