COM50080 - Claims / reliefs: loss and non-trading deficits carry-back: changing the EDP

You should note that although the examples in this panel are for CTPF APs, the principles relate equally to CTSA APs.

The computer-calculated EDP (Word 41KB) (Effective Date of Payment) of a loss or non-trading deficit carry-back posting will produce the wrong result for interest purposes when

• A carry-back has already caused a repayment or reallocation for the AP
• There has already been a repayment or reallocation for the AP as a result of a carry-back and you amend the amount of the carry-back
• The carry-back results in the displacement of another relief or set-off that you would have allowed if the company had not made the carry-back claim

You must recognise such cases, and intervene by

• • Correcting the EDP where that is possible

• • Or
    

• • Helping the Accounts Office to calculate interest manually in other cases. For more information see subject ‘Clerical Interest Indicator’ (COM50090)

Correcting the Effective Date of Payment (EDP)

You can over-ride the computer-calculated EDP and enter a non-standard EDP, in appropriate cases, when you

• Make or amend an assessment using Function RAMA (Record / Amend Assessment), Function PASR (Prepare Assessment Based on Return) or PAST (Prepare Full Assessment) on screen COT120M

• Enter a carry-back using Function RECB (Record Amounts Carried Back) - screen COT193D / E

You can only correct the interest position by correcting the EDP when giving effect to

• A carry-back that only displaces some other relief or set-off, and so does not itself satisfy any outstanding liability to CT. Example 1 (Word 38KB) illustrates such a case

It is not possible to correct the interest position by amending the EDP if you cannot give the carry-back posting a single correct EDP. Example 2 (Word 44KB) illustrates such a case.

When it is not possible to correct the EDP you will need to intervene by setting the Clerical Interest Indicator (CII (Word 32KB)) if it is not set already.

When you have amended the assessment you will have to make any repayment using Function DIRR (Direct Repayment). In these cases you will also need to send a form CT250(P) to the Accounts Office to advise them of the interest consequence of the carry-back.

For a list of forms relevant to this subject, see COM50081.

For a list of functions to use in particular situations, see COM50082.