Claims / reliefs: loss and non-trading deficits carry-back: changing the EDP
The COTAX calculated effective date of payment (EDP (Word 41KB)) of a loss or non-trading deficit carry-back posting produces the wrong result for interest purposes when:
- a carry-back has already caused a repayment or reallocation for the AP
- there has already been a repayment or reallocation for the AP as a result of a carry-back and you amend the amount of the carry-back
- the carry-back results in the displacement of another relief or set-off that you would have allowed if the company had not made the carry-back claim.
You must recognise such cases and intervene by correcting the EDP where that is possible, or helping the CT Unit Cumbernauld to calculate interest manually where it is not possible. See COM50090 for more information.
Correcting the effective date of payment (EDP)
When you make or amend an assessment using function RAMA (Record / Amend Assessment), you can over-ride the COTAX calculated EDP and enter a non-standard EDP where appropriate.
You can only correct the interest position by correcting the EDP when giving effect to a carry-back that only displaces some other relief or set-off, and so does not itself satisfy any outstanding liability to CT. Example 1 (Word 38KB) illustrates such a case.
It is not possible to correct the interest position by amending the EDP if you cannot give the carry-back posting a single correct EDP. Example 2 (Word 44KB) illustrates such a case.
When it is not possible to correct the EDP, you must intervene by setting the clerical interest indicator (CII (Word 32KB)) if it is not set already.
When you have amended the assessment following the setting of CII, you have to make any repayment using function DIRR (Direct Repayment). In these cases, you also need to send a memo to the CT Unit Cumbernauld to advise them of the interest consequence of the carry-back.