In a Revenue Calculation case it will be necessary to calculate
prior year adjustment claims to enable capture of the return to be
completed. It is recommended that you use the SA Tax Calculator on
the SEES menu to calculate the relief due, and that a copy of the
computation is placed in the return for future reference.
When using function CAPTURE RETURN the computer will display
error and warning messages to prompt you when to enter an amount.
The claims can be for the following
A claim can only be considered as valid if it is made within the time limits below
| Tax Calculation Summary page TCS 2, boxes 13, 14 or 15 Entry | Type of Claim | Return Entries | Time Limit |
| TCS 2 box 13 | Post cessation receipts | Additional information page Ai 1 boxes 14 and 15 | Fixed filing date + 1 year |
| TCS 2 box 13 | Farmers Averaging or
Literary / Artistic Spreading
(Increase in liability) | Self-employment (full) page SEF 4 box 70, or Partnership (short) page PS 1 boxes 10 and 11, or Partnership (full) page PF 1 boxes 10 and 11 | Fixed filing date + 1 year |
| TCS 2 box 14 | Losses carry back | Self-employment (short) page SES 2 box 31, or Self-employment (full) page SEF 4 box 77, or Lloyds Underwriters page LU 4 box 58, or Partnership (short) page PS 2 box 21, or Partnership (full) page PF 3 box 42, or UK property page UKP 1 box 17, or Capital Gains Summary page CG 1 boxes 11 and 13 | Fixed filing date + 1 year |
| TCS 2 box 14 | Farmers Averaging or
Literary / Artistic Spreading
(decrease in liability) | Self-employment (full) page SEF 4 box 70, or Partnership (short) page PS 1 boxes 10 and 11, or Partnership (full) page PF 1 boxes 10 and 11 | Fixed filing date + 1 year |
| TCS 2 box 15 | Losses brought back | Other information section of Additional information page Ai 3, boxes 3 and 4 | Fixed filing date + 2 years |
Relief to carry back Losses, Farmers Averaging or Literary /
Artistic Spreading to the previous year cannot be calculated until
the return for the earlier year has been received. If the return
for the earlier year is outstanding there must not be an entry in
TCS 2 box 14. The case will need to be held on BF and the claim
dealt with manually once the earlier years return is received.
A claim to carry back relief of one SA year to an earlier
one gives rise to an overpayment or underpayment.
The adjustment is made in terms of tax and for interest
purposes it increases or reduces the liability of the year in which
the event occurs. The adjustment is calculated by reference to the
taxpayer’s income and the rate of tax and allowances of the
prior year.
When calculating the relief you should also take into
account
Any personal pension contributions which no longer qualify for
tax relief should be notified to FICO (Advice on schemes) in
accordance with RE294.
If your calculation results in the claimant having no or
insufficient income, then any surplus Married Couples Allowance or
Blind Persons Allowance is available for transfer to the spouse or
civil partner.
Farmer’s averaging or Literary / Artistic
spreading
In a Revenue calculation case you must take account of the
consequential impact on any RAR claim when dealing with the
Farmer’s averaging or Literary / Artistic spreading claim
where
And
In cases where the taxpayer has self calculated the relief due,
any adjustment would need to be made by enquiry.
Trading losses
A self calculating taxpayer is required to enter the amount of
their claim in TCS 2 box 15. In Revenue calculation cases you are
required to calculate the amount from the information given on the
return and enter the amount in TCS 2 box 15. The figure is entered
during capture of the return details and the Freestanding Credit is
automatically entered on the taxpayer's record.
Before processing a claim for losses to be brought back you
should check that the accounting period (AP) for the year of loss
has finished or, where the basis period for the year of assessment
includes more than one AP, that each of them has finished.
If the AP for the year of loss has not finished you should
explain to the taxpayer / agent that the claim cannot be processed.
You should invite them to write to you again when they can validly
claim the loss.
Claims to carry back to an earlier year Loss relief may be made
on the return or by letter. If a claim is made in advance of the
return for the year in which the event occurred, some entries are
required on the following return. Other claims must be made on the
return.
A self calculating taxpayer is required to enter the amount
of their claim in TCS 2 box 14. In Revenue calculation cases you
are required to calculate the amount from the information given on
the return and enter the amount in TCS 2 box 14. The figure is
entered during capture of the return details and the Freestanding
Credit is automatically entered on the taxpayer's record.
