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HMRC internal manual

COTAX Manual

CT Pay and File: assessments: loss determinations (S41 TMA 70): losses and surrenderable amounts

S41A TMA 1970 set out the determination procedure applying to trading losses and other amounts available for surrender as group relief in respect of CT Pay and File APs.

You must determine the following amounts under that procedure as follows.

  • In every case in which a trading loss is suffered; the gross trading loss incurred in a CT Pay and File AP before any set-off or relief.

The loss is computed in the same way as trading income would have been computed in that period, see Section 393(7) ICTA 1988.

  • If the company is making a group relief surrender; the maximum amounts theoretically available for surrender as group relief under Section 403(3), (4) and (7) ICTA 1988. These are:

    • excess capital allowances given by discharge or repayment over income of the specified class. See the Company Taxation Manual (CTM) at CTM80120 for further information
    • excess management expenses over total profits
    • excess charges over total profits.

    These are the gross figures, whether or not there is a claimant company able to use the relief, or any amount has been wholly or partly relieved in some other way.

You make the determination by giving notice to the company in writing. If you need to make a determination and there is any question over the amount to be determined, you must do so manually.

The letter must clearly state the company’s right of appeal and you must send a copy to any agent acting for the company.

You may also use a free-format message when using Functions PASR (Prepare Assessment Based On Return) or PAST (Prepare Full Assessment) to assess agreed figures in the return.

You must clearly show the amount determined, its nature and that the amount is determined under S41A TMA 1970.

Using the determination procedure lets you settle the liability for a CT Pay and File AP before a group has finalised its group relief claims.

A determination is final if it is not appealed within 30 days of the date of issue. If appealed, it becomes final when determined by agreement, by the Tribunal or by the Courts, subject to:

  • the company claiming relief under S36(3) TMA 1970 against an assessment made to recover tax lost attributable to fraudulent or negligent conduct. See the Enquiry Manual at EM3905 for more information
  • the company claiming, or varying a claim to, relief under S43A TMA 1970 where the claim is to be made against a non-culpable discovery assessment. See Assessment Procedures AP2170 for more information
  • you discovering that a determination of trading losses, or other amounts available for surrender as group relief, is or has become excessive and making a direction under S41B TMA 1970. See COM152040 for more information.


  • COM152012 for a list of functions to use in particular situations
  • COM152013 for legislation applying to this subject.