COM51070 - Claims / reliefs: ACT: clerical interest indicator
This subject is presented as follows
Automatic setting of the Clerical Interest Indicator
COTAX makes repayments and reallocations by reference to the latest payment type posting(s) on the AP record (this includes any carry-back postings) and calculates repayment interest accordingly.
The computer sets the Clerical Interest Indicator (CII (Word 32KB)) automatically against an AP after
- A repayment or reallocation is made by reference to 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.
Manual setting of the Clerical Interest Indicator
You should set the Clerical Interest Indicator (CII) against an AP when you
- Recognise that the computer-calculated EDP will produce the wrong result for interest purposes
- Cannot put it right by amending the computer-calculated EDP (Word 41KB)
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)
- It displaces some other relief(s) or set-off(s) that would otherwise fall to be given (such as DTR, Income Tax, Marginal Small Companies’ Relief or SC60 tax) and also reduces the CT liability
- 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 the carry-back posting cannot be given a single correct EDP. Example 1 (Word 44KB) and Example 2 (Word 42KB) illustrate such cases.
You must recognise when that is so and set the Clerical Interest Indicator (CII) yourself. COTAX cannot recognise the interest implications, so will not set the CII automatically.
Effect of setting the Clerical Interest Indicator
When the Clerical Interest Indicator (CII) is set against an AP, it prevents
- Automatic interest calculations
- Automatic issue of demand notes
- Automatic issue of repayments
Note: Setting the Clerical Interest Indicator does not prevent COTAX from calculating repayment interest and adding it to any repayment you make using Function DIRR (Direct Repayment).
Form CT250(P)
When COTAX 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. When you make a carry back ACT posting, they need information from you. You should, therefore, send a memo to the Accounts Office whenever you carry back ACT and
- You have set the CII
- COTAX 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 functions to use in particular situations, see COM51072.
