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HMRC internal manual

Compliance Handbook

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Interest: Repayment interest: Special provisions for start dates: Relief for losses and averaging - example

You must check whether, and from which date, the FA 2009 interest rules apply to the tax or duty you are dealing with. See CH140160 for full details.

Carry back losses

Benjamin incurred a loss in 2012-13. He made a claim to treat the loss as though it arose in 2011-12. The loss relief creates an overpayment of £25,000, which is given effect by repayment of tax deducted at source for 2012-13. See for example SACM11020.

Regardless of when the repayment of £25,000 is made, the repayment interest start date is 31 January 2014, being the 31 January following the ‘later year’, see CH146280. Any interest on the repayment will run from 31 January 2014 to the date on which the repayment is made, if later.

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Averaging

The profits of Farmer Brown for ITSA years 2012-13 and 2013-14 differed so much that he qualified to claim for the profits to be averaged, with half of the total taxable for 2012-13 and the other half taxable for 2013-14.

The averaging claim tax adjustment is made in 2013-14 and results in a repayment of £3,400.

The repayment interest start date is 31 January 2015, being the 31 January following the later year. Interest on the repayment will run from 31 January 2015 to the date on which the repayment is made, if later.

FA09/SCH54/PARA7