COM50030 - Claims / reliefs: loss and non-trading deficits carry-back: non-trade deficit c/b & late payment int

Under S83(2) FA 1996 a company may claim to carry back a non-trading deficit against profits of the three previous years apportioning profits of an AP where necessary.

S83(2) was amended by S40(2) F2A 1997. For deficits arising on loan relationships on or after 2 July 1997 a company may only claim to carry-back a deficit against profits of the preceding 12 months.

S87A(4A) TMA 1970 recognises that any CT remaining unpaid for the earlier AP for which the set-off takes place is being reduced by a relief that originates later. It ensures that late payment interest (Word 27KB) should continue to run until the due date for the later AP.

Section 87A(4A) achieves this by

• Identifying the notional unpaid CT liability that would have been due if the deficit carry-back claim had not been made
• Charging Section 87A interest on the unpaid notional liability so computed, up to the earliest due date of the AP from which the loss was carried back

For legislation applying to this subject, see COM50031.