COM51010 - Claims / reliefs: ACT: COTAX treatment of ACT carry-back
COTAX treats a carry-back of ACT as if it was a payment made on an Effective Date of Payment (EDP (Word 41KB)). It does not treat it as a reduction in the charge.
It calculates the EDP and computes interest taking account of the rules in
- S87A(4) TMA 1970. For more information see subject ACT Carry-Back And Late Payment Interest (COM51020)
- S826(7) ICTA 1988. For more information see subject ACT Carry-Back And Repayment Interest (COM51030)
Note: COTAX cannot take account of the special rules that apply when surplus ACT generated by the carry-back of a trading loss or a non-trading deficit, is itself carried back in
- S87A(7) TMA 1970. For more information see subject ‘ACT Carry-Back And Late Payment Interest’
- S826(7AA) TMA 1970. For more information see subject ’ACT Carry-Back And Repayment Interest’
If you look at the payment record in Function VPPD (View Payment And Posting Details), you will see more than one posting resulting from an assessment that includes a carry-back of ACT. There will be
- A gross CT charge, exclusive of carry-backs (posting type ‘ASM’ for a main assessment ‘ASA’ for an amendment)
- One or more payment type postings (posting type ‘ACT’ for ACT) expressed as amounts of tax paid
Postings following an ACT carry-back
Repayments resulting from carry-backs
COTAX makes repayments and reallocations by reference to the latest payment type posting(s) on the AP record, including any carry-back postings, and calculates repayment interest accordingly.
It sets the Clerical Interest Indicator CII (Word 32KB) automatically after making a repayment or a reallocation out of a carry-back posting. It does this because it would not be able to calculate the interest position correctly if another repayment arose for the same AP. For more information see subject ‘Clerical Interest Indicator’ (COM51070) in this section.
For a list of functions to use in particular situations, see COM51011.
For legislation applying to this subject, see COM51012.
