DMBM405270 - Interest: Interest Review Unit (IRU): Income Tax Self Assessment (ITSA): carry back claims

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Carry back claims include:

  • Pension carry back
  • Loss carry back (including Lloyds losses) Farmers’ averaging

Most objections to interest where a carry back claim has been made relate to a difference of opinion over the Effective Date of Payment (EDP) awarded to a set-off or Free Standing Credit (FSC). The correct EDP is the date the valid claim was made or the due date of the tax bill to which the credit is to be set, whichever is the later. Provided the local office follows the instructions in the SAM (see 'Repayments-Claims made outside a return') the EDP will be correctand the interest charge should be upheld.

Where it is confirmed that the wrong date is used the local office can change the EDP as long as the revised date is not more than 12 months earlier than the first EDP used on the record. Any objection received where this is the case should be returned to the originating office.

Where the local office is unable to change the EDP, the IRU will:

  • theoretically apply the revised date
  • recalculate the interest
  • give up the excess.