Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

COTAX Manual

From
HM Revenue & Customs
Updated
, see all updates

Claims / reliefs: other reliefs: capital allowances - giving effect to claims

This subject is presented as follows.

Capital allowances claim made in a return
Capital allowances claim made by amending a return
Capital allowances claim made after the time limit for amending the return has expired
Capital allowances claim for one AP that reduces the amount of capital allowances available for another AP 

Capital allowances claim made in a return

Where a return includes a capital allowances claim that is reflected in the company’s self assessment, it is automatically recorded on COTAX subject to normal validation checks. If any manual intervention is needed, the case appears on a work list. See COM23150 for more information.

Capital allowances claim made by amending a return

If a company has already submitted its return, it may make capital allowances claims by amending its return.

If the claim is made on paper within the time limit for amending the return, the caseworker uses the ‘record a taxpayer amendment’ option in function RAMA to record the capital allowances claim on COTAX.

If the amendment is made electronically using the CT Online Service, COTAX records it automatically. It does not appear on any work list for further action unless the ‘Capital allowances first-year tax credit payable’ box has been completed (box 565 on a CT600 version 3 or box 170 on a version 2), in which case it is listed on MRPL (Manual Repayments List), or there are other entries or attachments that need manual intervention.

See COM23010 for more information.

Capital allowances claim made after the time limit for amending the return has expired

If the claim is made on paper after the time limit for amending the return has expired, the caseworker must:

  • not use the ‘record a taxpayer amendment’ option in function RAMA
  • write to the company explaining why the capital allowances claim cannot be accepted.

The CT Online Service does not allow the submission of an amendment after the time limit has expired.

Claims to capital allowance must be made in, or by amendment of, the company’s tax return. It follows that:

  • schedule 1A TMA 1970 (claims or elections that cannot be dealt with by inclusion in a return either as first made or by amendment) does not apply to capital allowances claims
  • you should never use the ‘process a claim’ option in function RAMA to record a capital allowances claim.

Capital allowances claim for one AP that reduces the amount of capital allowances available for another AP

If the effect of making a capital allowances claim for one AP is to reduce the amount of capital allowances available in another AP for which the company has already made its return, the company must amend that return within 30 days.

If the company does so, the caseworker uses the ‘record a taxpayer amendment’ option in function RAMA to record on COTAX the consequential amendment to the capital allowances claim for that return.

If the company does not make the necessary amendment within 30 days, the caseworker can:

  • use the ‘prepare a revenue amendment’ option in function RAMA to amend the return to make it consistent with the reduced amount of capital allowances available
  • enter a message in the free format message fields on screen COT121G such as ‘Para 83(3) Sch 18 FA 1998 amendment of return consistent with the amount available by way of capital allowances’.

See:

  • COM53012 for a list of functions to use in particular situations
  • COM53013 for legislation applying to this subject.