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HMRC internal manual

COTAX Manual

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HM Revenue & Customs
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CT Pay and File: claims / reliefs: ACT: correcting interest - responsible CT office (Action Guide)

To correct the interest that COTAX would charge, consider steps 1 - 13 below. The guide is presented as follows.

ACT carried back displaces a relief and a repayment is due Steps 1 - 5
   
ACT carried back displaces a relief and a repayment is not due Steps 6 - 7
Displaced ACT caused by a loss carry-back is itself carried back to an earlier AP Step 8
Repayment / reallocation already made as a result of a carry-back Steps 9 - 11
Repayment / reallocation already made as a result of a carry-back and you amend the carry-back Steps 12 - 13

ACT carried back displaces a relief and a repayment is due

1. Use function MAPS (Maintain AP Signals) to set the Clerical Interest Indicator (CII (Word 32KB)). See the Action Guide at COM153073 for more information.
   
2. If you are in a position to amend the assessment, use function PAST (Prepare Full Assessment) to give effect to the ACT carry-back.
3. If you can not make the assessment, use function RECB (Record Amounts Carried Back) to post the carry-back of the ACT.
4. Send a memo to the Accounts Office to show that no late payment interest is due.
5. Use function DIRR (Direct Repayment) to make the repayment.

ACT carried back displaces a relief and a repayment is not due

6. If you are in a position to make the assessment use function PAST (Prepare Full Assessment) to give effect to the ACT carry-back.
On screen COT120M amend the EDP shown for the ACT carry-back to the due date for the AP to which you have carried back the ACT.    
     
  7. If you can not make the assessment, use function RECB (Record Amounts Carried Back) to post the carry-back of the ACT.
On screen COT193D/E amend the EDP shown for the ACT carry-back to the due date for the AP to which you have carried back the ACT.

Displaced ACT caused by a loss carry-back is itself carried back to an earlier AP

8. Use function PAST (Prepare Full Assessment) to give effect to the ACT carry-back by amending the assessment).
On screen COT120M amend the EDP shown for the ACT carry-back to the due date for the AP from which the losses that displaced the ACT were carried back.  
   

Repayment / reallocation already made as a result of a carry-back

  COTAX set the Clerical Interest Indicator automatically after it made the earlier repayment or reallocation.
   
9. Use function PAST (Prepare Full Assessment) to give effect to the ACT carry-back by amending the assessment.
10. Send a memo to the Accounts Office to show that no late payment interest is due.
11. Make the repayment using function DIRR (Direct Repayment).

Repayment / reallocation already made as a result of a carry-back and you amend the carry-back

  COTAX set the clerical interest indicator automatically after it made the earlier repayment or reallocation.
   
12. If you are increasing the carry-back:
  • use function PAST (Prepare Full Assessment) to give effect to the ACT carry-back by amending the assessment
  • send a memo to the Accounts Office to show that no late payment interest is due
  • make the repayment using function DIRR (Direct Repayment).    
      13. If you are reducing the carry-back, you need to make an assessment under S252 ICTA 1988. See the Company Tax Manual at CTM20260 and COM153080 for guidance.