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HMRC internal manual

COTAX Manual

HM Revenue & Customs
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CT Pay and File: claims / reliefs: ACT: COTAX treatment of ACT carry-back

COTAX treats a carry-back of ACT as if it was a payment made on an Effective Date of Payment (EDP (Word 41KB)). It does not treat it as a reduction in the charge.

It calculates the EDP and computes interest taking account of the rules in:

  • S87A(4) TMA 1970. See COM153020 for more information
  • S826(7) ICTA 1988. See COM153030 for more information.

Note: COTAX cannot take account of the special rules that apply when surplus ACT generated by the carry-back of a trading loss or a non-trading deficit, is itself carried back in:

  • S87A(7) TMA 1970. See COM153020 for more information
  • S826(7AA) TMA 1970. See COM153030 for more information.

If you look at the payment record in Function VPPD (View Payment And Posting Details), you see more than one posting resulting from an assessment that includes a carry-back of ACT. There is:

  • a gross CT charge, exclusive of carry-backs (posting type ‘ASM’ for a main assessment or ‘ASA’ for an amendment)
  • one or more payment type postings (posting type ‘ACT’) expressed as amounts of tax paid.

Postings following an ACT carry-back

See Example (Word 35KB).

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Repayments resulting from carry-backs

COTAX makes repayments and reallocations by reference to the latest payment type posting(s) on the AP record, including any carry-back postings and calculates repayment interest accordingly.

It sets the Clerical Interest Indicator CII (Word 32KB) automatically after making a repayment or a reallocation out of a carry-back posting. It does this because it would not be able to calculate the interest position correctly if another repayment arose for the same AP. See COM153070 for more information.


  • COM153011 for a list of functions to use in particular situations
  • COM153012 for legislation applying to this subject.