CT Pay and File: accounting periods: superseded AP - assessment already made
When you use Function MAPD (Maintain AP Dates) you must, where possible, relate a superseded AP to a new superseding AP.
If you do
COTAX copies the existing assessment on the superseded AP to the assessing record for the superseding AP as
- A draft amendment, when an assessment exists
- A draft main assessment, when only an unissued draft exists
For recovery purposes COTAX still treats it as an assessment for the superseded AP until
- You issue an assessment or an amended assessment showing the corrected AP dates
You should issue this assessment at once if the assessment on the superseded AP is not under appeal.
When the assessment is under appeal you are not able to amend it until the appeal has been determined or you are ready to determine it by agreement.
In the meantime COTAX issues payment applications for any collectible amounts in the assessment. The payment applications show late payment interest accrued to today’s date from the due date (Word 49KB) of the AP on the payment application. The interest figure is wrong if the AP end date is wrong.
If the error is in favour of the company, that is, the true AP end date is earlier than that shown in the assessment, you need take no action.
If the error is in favour of HM Revenue & Customs, that is, the true AP end date is later than that shown in the assessment, either
- Use Function HAPP (Handle Appeal) to informally stand over the collectible tax
- Explain to the company that COTAX will continue to calculate interest incorrectly until you amend the assessment to show the true AP
If you choose the latter option, send a memo to Accounts Office telling them what you have done and identifying the AP that will be shown on the amended assessment when you issue it.
When you amend the assessment, COTAX
- Enters an equal and opposite amount for all tax charge postings on the company accounting record for the superseded AP
- Sets up a corresponding charge posting or postings on the accounting record for the superseding AP
If payments have been posted to the superseded AP, the record for the superseded AP becomes ‘overpaid’ and COTAX either
- Reallocates and / or repays automatically
- Puts the case on LOPD (Overpayments Review List) work list if it is inhibited from repaying or reallocating automatically
See COM120000 onwards for the appropriate action to be taken in such a case. However, note that
- When COTAX makes an automatic reallocation it will satisfy an earlier tax liability before a later one. The reallocation will not therefore necessarily be to the superseding AP
- The reallocation may involve the payment or crediting of repayment interest in circumstances in which it is not strictly due.(This content has been withheld because of exemptions in the Freedom of Information Act 2000)
If, exceptionally, you do not relate the superseded AP to a superseding AP, when for example you have created fewer superseding APs than those superseded, COTAX warns you that there is an ‘unrelated assessment’. It limits the actions you can take in respect of an unrelated assessment. You
- Can discharge it, or amend the profits and tax charged
- Cannot change the AP to which it relates
- Cannot make a further assessment for the superseded AP
Note: You should normally discharge any ‘unrelated assessments’.
For a list of functions to use in particular situations, see COM150010.