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HMRC internal manual

COTAX Manual

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HM Revenue & Customs
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Claims / reliefs: loss and non-trading deficits carry-back: getting the ‘LOS’ posting correct (Action Guide)

To get the ‘LOS’ posting correct for APs where there is more than one rate of tax and marginal relief, consider steps 1 - 9 below. The guide is presented as follows.

The carry-back changes the CT rate from the main rate with marginal relief to the small profits rate Steps 1 - 5
Marginal relief is due before or after the carry-back and you have overwritten the COTAX calculated figure Steps 6 - 9

The carry-back changes the CT rate from the main rate with marginal relief to the small profits rate

  1.  Use function RAMA (Record / Amend Assessment).

  2.  When you reach screen COT120M, enter ‘Y’ in response to the question ‘MSCR due before but not after c/b?’. See COM50113 for further information.

3. Use the [Prev Panel] button to go back to screen COT120F.

  1.  Check that the figures in that screen for the number of 51 per cent companies and Franked Investment Income (FII) are correct. If they are not, amend the entries.

  2.  Continue to amend the assessment.

Marginal relief is due before or after the carry-back and you have overwritten the COTAX calculated figure

  1.  Use function RAMA (Record / Amend Assessment) and enter on screen COT120F the correct number of 51 per cent companies and Franked Investment Income.

  2.  Make any other amendments to the assessment including the loss carry-back, and let COTAX calculate the tax and any marginal relief due.

  3.  If tax is charged at the small profits rate after the carry-back, enter ‘Y’ in the box provided in screen COT120M in response to the question ‘MSCR due before but not after c/b?’. See COM50113 for further information.

  4.  Continue to amend the assessment.