COM51060 - Claims / reliefs: ACT: correcting interest - responsible CT office

The COTAX-calculated EDP (Word 41KB) (Effective Date of Payment) of an ACT 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
• The carry-back is of surplus ACT some or all of which has become surplus because of the carry-back of a loss from a still later AP

You must recognise such cases, and intervene by

• Correcting the EDP where that is possible

• Helping the Accounts Office to calculate interest manually in other cases. For more information see subject ‘Clerical Interest Indicator’ (COM51070)

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 PASR (Prepare Assessment Based On Return) - screen COT120M or PAST (Prepare Full Assessment) - 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
• A carry-back of ACT all of which has become surplus only because it has been displaced by a trading loss carried back from a still later AP. Example 2 (Word 57KB) 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 functions to use in particular situations, see COM51062.