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HMRC internal manual

COTAX Manual

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Claims / reliefs: CTSA claims frameworks: claims and elections not made in a return

This subject is presented as follows

Claims which cannot be made in a return
Function RAMA (Record / Amend Assessment)

Claims which cannot be made in a return

Paragraph 59 FA 1998, applies Schedule 1A TMA to claims or elections that cannot be dealt with under Paragraphs 57 or 58, that is, by inclusion in a return as first made or by amendment. In particular, Schedule 1A applies to

  • An election that does not relate to a particular AP

And

  • A claim made within the time limit for that claim but after the time limit for amendment of the return

An election that does not relate to a particular AP may have effect in relation, for example, to a particular sort of income until it is withdrawn. Such an election is not tied to specific APs, takes effect from a particular date and remains in force until it is revoked. Any such claim or election falls within Schedule 1A in all circumstances.

Claims and elections to which Schedule 1A applies are to be made outside any return, to an officer of the Board, in such form as the Board may require. They must also contain a declaration that the particulars given are correctly stated ‘to the best of the information and belief of the person making the claim’. In practice, the Board does not normally determine forms for CT claims and the statutory requirement for the claim to contain a declaration is not normally insisted upon.

Much the same powers and rights of correction, amendment and enquiry apply to these claims as to returns, as do the record-keeping and record preservation obligations and the related penalties and the finality rules. There are, however, important distinctions between the Schedule 1A TMA 1970 and Schedule 18 FA 1998 enquiry regimes and different closure procedures apply to each.

For more information about Schedule 1A, see the Enquiry Handbook (at EH1080-1082, EH930 onwards - particularly EH949, and EH460 onwards) and the Company Taxation Manual at CTM90635. For more information on concluding Schedule 1A enquiries, see COM71140.

Claims made outside the return are subject to the same ‘process now, check later’ treatment as claims made in a return. They must be given effect ‘as soon as practicable’.

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Function RAMA (Record / Amend Assessment)

If the claim cannot be included in a return, either when the return is first made or by amendment, and is within Schedule 1A TMA 1970

  • Use the Process a Claim option in Function RAMA to record the claim and any changes needed to the company’s figures

When you have confirmed the changes, COTAX

  • Records the company’s claim (or corrected claim)
  • Issues a claim acknowledgement to the company, with a payslip attached if there is any outstanding liability for the AP, showing the amended figures and any free-format message you entered. If necessary, you can suppress assessing output

Note: Whereas you process the claim with COTAX by making changes to the last issued assessment version for the AP, you give effect to the claim by discharge or repayment, not by amendment of the company’s return. The printed output reflects that and is headed ‘Claims and elections not included in a company tax return’.

  • Deals with any overpayment which results from the claim by

    • Reallocating the money to any outstanding liability on the COTAX record and repaying any balance or
    • Putting it on the Overpayments Review List (LOPU) or Overpayments List (LOPD) Work List if it is inhibited from handling the overpayment automatically
  • If the claim affects the tax base for the penalty, prompts you to allow the automatic issue of a revised penalty determination or use Function PPEN (Prepare Penalty Determination) to issue it manually. It makes an entry on the Penalties Requiring Review List (PENR) Work List and removes it when the automatic process takes place or you use Function PPEN

For a list of functions to use in particular situations, see COM52011.

For legislation applying to this subject, see COM52012.