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HMRC internal manual

Company Taxation Manual

Corporation Tax self-assessment (CTSA): the payment obligation: displaced ACT carried back - repayment interest

ICTA88/S826 (7AA) is for repayment interest the parallel provision to TMA70/S87A (7) for late payment interest.

It deals with surplus ACT created by a loss that is carried back (other than against an accounting period falling wholly within the previous twelve months) triggering a repayment for the earlier period.

It ensures that in these circumstances repayment interest is restricted to the period after the due date for the accounting period from which the loss relief is carried back.

This provision applies where the period to which the loss is carried back ends after 30 September 1993 (that is, falls within CTPF). If the consequent ACT carry-back is to an accounting period before the start of CTPF, the restriction is made to repayment supplement paid under ICTA88/S825.

COTAX cannot deal correctly with cases like this without intervention. See the On-line Company Tax Manual (COM), in the ‘claims/reliefs’ business area.