EM4816 - Penalties: Incorrect Returns, Accounts etc: Company Losses Carried Back
This guidance applies to returns with a filing date on or before 31 March 2009.
Guidance for returns and other documents with a filing date on or after 1 April 2009, where the return relates to a tax period beginning on or after 1 April 2008, is contained in CH80000+.
Where a culpable tax difference has been established for an earlier year and that year is affected by a loss relating to a later year claimed to be carried back, the loss should be regarded as primarily allocated against any non-culpable tax.
Example
APE 31 December 2002
| Corporation tax payable based on return as submitted | 30,000 |
| Additional tax established by enquiry (culpable) | 4 0 , 0 0 0 |
| Total tax payable in first instance | 70,000 |
APE 31 December 2003
CT return received including claim to loss relief that amends the previous years return by £50,000 tax.
No enquiry is made into the return or the claim.
Revised Computation of tax for Enquiry year (APE 31 December 2002)
| Corporation tax payable based on return as submitted | 30,000 | |
| Additional tax established by enquiry | 40,000 | |
| less: Loss relief (total £50,000) | 3 0 , 0 0 0 | 2 0 , 0 0 0 |
| Non-culpable tax | nil | |
| Culpable tax | 20,000 |
The ‘tax difference’ is the difference between the final tax after loss relief (£20,000) and the original tax after loss relief (nil).