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HMRC internal manual

COTAX Manual

HM Revenue & Customs
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Claims / reliefs: loss and non-trading deficits carry-back: claims to surrender losses and deficits

Any loss or non-trading deficit set-off in an AP that is displaced by a carry-back, remains effective when you calculate the amount of tax that attracts late payment interest under S87A(6) TMA 1970.

This is not the case if the displaced relief is surrendered to another group company as group relief.

The displaced amount is not then regarded as available to the surrendering company, and interest is calculated as if it had never existed.

There is no need to intervene in such cases because COTAX calculates the EDP (Word 41KB) without regard for displaced reliefs.

See COM50061 for legislation applying to this subject.