COM50090 - Claims / reliefs: loss and non-trading deficits carry-back: clerical interest indicator

This subject is presented as follows

Automatic setting of the Clerical Interest Indicator

The computer sets the CII (Word 32KB) automatically against an AP after

• You make a repayment or reallocation because of a carry-back posting

• You reduce or withdraw a recorded carry-back to that AP

It does this because it would not be able to calculate the interest position correctly if another repayment arose for the same AP.

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Manual setting of the Clerical Interest Indicator

You should set the Clerical Interest Indicator against an AP when you

• Recognise that the computer-calculated EDP (Word 41KB) will produce the wrong result for interest purposes

• Cannot put it right by amending the computer-calculated EDP

This will be the case when

• • You include, in an assessment or amendment, a carry-back to that AP (other than of trade losses from an AP ending no more than 12 months after the end of the AP)

• • And
    

• • It displaces some other relief(s) or set-off(s) that would otherwise fall to be given, such as ACT, DTR, Income Tax, Marginal Relief or SC60 tax, and also reduces the CT liability 

• • Or
    

• • You include, in an assessment or amendment, a carry-back to that AP of surplus ACT which is partly, but not wholly, caused by the carry-back of a trading loss from a still later AP

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, see COM50040 Example 2 and COM50080 Example 2.

You must recognise when that is so and set the Clerical Interest Indicator (CII) yourself. The computer cannot recognise the interest implications, so will not set the CII automatically.

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Effect of setting the Clerical Interest Indicator

When the Clerical Interest Indicator is set against an AP, it prevents

• Automatic interest calculations
• Automatic issue of demand notes
• Automatic issue of repayments

Note: Setting the CII does not prevent the computer from calculating repayment interest (Word 29KB) and adding it to any repayment you make using Function DIRR (Direct Repayment).

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Form CT250(P)

When the computer sets the CII automatically the case does not appear immediately on the ‘Clerical Interest Indicator’ (CIIW) work list in the Accounts Office. If you make a further amendment to the assessment for the AP the case will appear on the work list. Therefore, you do not need to send any information to the Accounts Office regarding interest when you make or amend an assessment to give effect to a first claim for a carry-back to an AP.

However, when you set the CII manually the case will always appear immediately on the ‘Clerical Interest Indicator’ (CIIW) work list in the Accounts Office.

When a case appears on the CIIW work list staff in the Accounts Office have to calculate interest manually. Where a relief has been displaced, they need information from you. You should, therefore, complete a form CT250(P) and send it to the Accounts Office whenever

• You displace a relief and have set the CII

• The computer has set the CII automatically and you are making a further amendment to the assessment. Send the form even if no alteration to the interest position is required

Note: The Accounts Office can not make any repayment that is due to the company. Once the interest has been corrected you must use Function DIRR (Direct Repayment) to make the repayment.

For a list of forms relevant to this subject, see COM50091.

For a list of functions to use in particular situations, see COM50092.