COM153100 - CT Pay and File: claims/reliefs: ACT: carry-back Advance Corporation Tax (ACT), no assessment made

You use function RECB (Record Amounts Carried Back) to allow a carry-back when:

  • a return has been logged for an Accounting Period (AP)
  • you later receive an acceptable claim that results in a carry-back to that AP
  • you have not yet made an assessment for that AP and you are not in a position to make one
  • the CT liability for that AP is reduced by the carry-back

The figure to enter in function RECB is the tax effect of the carry-back. In the case of Advance Corporation Tax (ACT) this is the amount of ACT you want to carry back.

You can also use function RECB if, unusually you need to reduce the amount of an existing carry-back relief, whether it was given using function RECB or in an assessment, and you are still not in a position to make or amend the assessment.

You cannot use function RECB to reduce an existing carry-back out of which a repayment has been made. You must:

  • set the Clerical Interest Indicator (CII). See COM153070 for more information
  • use function ARTA (Amend Returned Tax Amount) to increase the charge. That function allows you to put the correct tax into charge but cannot correct the interest position.

If you use both function ARTA and function RECB, COTAX assumes that the figure you record in function ARTA for Total CT due is the liability net of any carry back relief posted using function RECB.


Example below illustrates such a case as follows.

  1. The return for AP 1 was logged some time ago showing CT due of £500,000 and there are Case I deductions of £50,000 under enquiry 

  2. You receive the return for AP 2 showing surplus ACT of £100,000 and a claim to carry it back.  You agree the figures and use function RECB (Record Amounts Carried Back) to record the carry back against the AP 1 liability.  This leaves a net charge of £400,000 

  3. You receive a group relief claim that would reduce the CT due for AP 1 by £200,000.  You accept the group relief claim but are not ready to make/amend the assessment 

  4. You need to use function ARTA (Amend Returned Tax Amount) to record the reduction in charge.  You may expect to enter the amended ‘Total CT due' as £300,000 (the original £500,000 less £200,000 group relief) because you have already posted the carry back separately using function RECB. 

Please note that:  This would produce the wrong result.  The computer interprets the entry in function ARTA as being the charge net of the carry back already posted.  It will only post a reduction in the return charge of a further £100,000, leaving £300,000 in charge.  You need to amend the total CT due to the net amount that you wish to be left recoverable (£200,000). 

See COM153101 for a list of functions to use in particular situations.