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HMRC internal manual

COTAX Manual

CT Pay and File: assessments: losses and ACT

You cannot make a fastpath assessment for any CT Pay and File AP if the return includes losses or ACT carried back from a later AP.

You must use Function PASR (Prepare Assessment Based On Return) or PAST (Prepare Full Assessment) to make an assessment that includes a carry-back.

In either of those assessing functions, you must enter each amount of loss or ACT carried back separately, showing the AP from which it comes. If you are using Function PASR and find you need to do this, you must use the [Switch To Full] button on screen COT120F to move to Function PAST. You may have to break down the figure for losses or ACT shown in the return to achieve this.

Also, you

  • Must enter ACT carry-backs (but not losses) as decimal amounts. For example, enter an ACT set-off of £2350 as 2350.00
  • Must enter the end date of each AP from which an amount is carried back in the format DD/MM/YYYY
  • Cannot enter more than one carry-back of the same type (ACT or loss) from the same AP against a single AP
  • Must enter losses carried back from later APs before losses for earlier ones. For example, if you are relieving losses carried back against AP ended 31/12/1994, from APs ended 31/12/1995 (£500), 31/12/1996 (£400) and 31/12/1997 (£300), enter them as

    • 31/12/1997 300
    • 31/12/1996 400
    • 31/12/1995 500
  • Must not leave any blank ACT carry-back fields above a carry-back that you enter or COTAX will create NIL payment postings on the record
  • Must enter ACT for earlier APs before later ones. For example, if you are relieving ACT carried back against AP ended 31/12/1994, from APs ended 31/12/1995 (£500), 31/12/1996 (£400), 31/12/1997 (£300) enter them as

    • 31/12/1995 500.00
    • 31/12/1996 400.00
    • 31/12/1997 300.00

For each amount carried back COTAX works out

  • The effective date of payment for interest purposes

And, if appropriate

  • What is allowable as tax paid at the 18 month point for tax-geared penalty purposes. For more information see COM100000 onwards

COTAX totals the losses and the ACT carry-backs and / or set-offs. In the notice of assessment issued, it shows a single total figure for losses carried back, and for ACT carried back and / or set-off.

However, when you view details of the assessments in Function DASS (Display Assessment Details), you see the amounts as you entered them, broken down into the respective APs.

It is important to understand how COTAX deals with carry-backs, and the interest consequences that can result. For further information see COM50000 onwards.

For a list of functions to use in particular situations, see COM151011.