Corporation Tax on Chargeable Gains: Indexation Allowance: Error on tables
We regret that some of the figures that we published for indexation allowance were wrong. The error affects only disposals of assets between 1 February and 31 July 2002. We have corrected the figures. We will identify cases where taxpayers have already submitted tax returns using these wrong figures; we will then contact those taxpayers. Companies which before 21 September 2002 took indexation factors from our website for February to July 2002 are asked to replace them with the correct figures.
- Who is affected?
- What is the error?
- What disposals are affected?
- Are the published figures now right?
- What is the Inland Revenue doing to ensure taxpayers do not lose out?
- What should I do?
- What should I do if I did not realise in time that this affected my company?
- How did this error happen?
- Will it happen again?
- Where can I get more information?
Companies (and other bodies within the charge to corporation tax on chargeable gains) that made disposals of assets that could lead to chargeable gains. Only disposals after 31 January 2002 and on or before 31 July 2002 are affected. Only some of these disposals are affected, depending on when expenditure was incurred.
Companies are affected only if they used figures in the indexation tables published on our website before 21 September 2002.
Individuals, trustees and personal representatives of the deceased are not affected.
Some indexation factors on our tables have been shown as "Nil" when there should have been a positive indexation factor. So chargeable gains calculated using the information were larger than if the correct figures had been used.
The Retail Prices Index (RPI) figure shown at the top of each month's table was correct.
Disposals in the period between 1 February 2002 and 31 July 2002 (inclusive), with related expenditure in the period between 1 May 2001 and 31 December 2001 (inclusive), may have been affected.
To check on the exact months of expenditure affected please use the link to the month of disposal below, or go to the summary table. There is also a link to the set of "nil" entries that remains correct:
Two figures were wrongly reported as Nil.
The correct indexation factors for the months of expenditure affected are as shown below:
| November 2001 - |
indexation factor is 0.001 |
| December 2001 - |
indexation factor is 0.002 |
Six figures were wrongly reported as Nil.
The correct indexation factors for the months of expenditure affected are as shown below:
| May 2001 - |
indexation factor is 0.002 |
| June 2001 - |
indexation factor is 0.001 |
| August 2001 - |
indexation factor is 0.003 |
| October 2001 - |
indexation factor is 0.001 |
| November 2001 - |
indexation factor is 0.005 |
| December 2001 - |
indexation factor is 0.006 |
Seven figures were wrongly reported as Nil.
The correct indexation factors for the months of expenditure affected are as shown below:
| May 2001 - |
indexation factor is 0.009 |
| June 2001 - |
indexation factor is 0.007 |
| August 2001 - |
indexation factor is 0.010 |
| September 2001 - |
indexation factor is 0.006 |
| October 2001 - |
indexation factor is 0.008 |
| November 2001 - |
indexation factor is 0.012 |
| December 2001 - |
indexation factor is 0.013 |
Seven figures were wrongly reported as Nil.
The correct indexation factors for the months of expenditure affected are as shown below:
| May 2001 - |
indexation factor is 0.011 |
| June 2001 - |
indexation factor is 0.010 |
| August 2001 - |
indexation factor is 0.013 |
| September 2001 - |
indexation factor is 0.009 |
| October 2001 - |
indexation factor is 0.011 |
| November 2001 - |
indexation factor is 0.015 |
| December 2001 - |
indexation factor is 0.016 |
Seven figures were wrongly reported as Nil.
The correct indexation factors for the months of expenditure affected are as shown below:
| May 2001 - |
indexation factor is 0.011 |
| June 2001 - |
indexation factor is 0.010 |
| August 2001 - |
indexation factor is 0.013 |
| September 2001 - |
indexation factor is 0.009 |
| October 2001 - |
indexation factor is 0.011 |
| November 2001 - |
indexation factor is 0.015 |
| December 2001 - |
indexation factor is 0.016 |
Seven figures were wrongly reported as Nil.
The correct indexation factors for the months of expenditure affected are as shown below:
| May 2001 - |
indexation factor is 0.010 |
| June 2001 - |
indexation factor is 0.009 |
| August 2001 - |
indexation factor is 0.011 |
| September 2001 - |
indexation factor is 0.007 |
| October 2001 - |
indexation factor is 0.009 |
| November 2001 - |
indexation factor is 0.013 |
| December 2001 - |
indexation factor is 0.014 |
The revised entries are set out below. In each case the original incorrect tables showed the indexation factor to be 'Nil'. If a cell is blank, then the original figure is still right.
| Expenditure in 2001 |
Disposals in 2002
|
|||||
|---|---|---|---|---|---|---|
| February | March | April | May | June | July | |
| May | 0.002 |
0.009 |
0.011 |
0.011 |
0.010 |
|
| June | 0.001 |
0.007 |
0.010 |
0.010 |
0.009 |
|
| July | ||||||
| August | 0.003 |
0.010 |
0.013 |
0.013 |
0.011 |
|
| September | 0.006 |
0.009 |
0.009 |
0.007 |
||
| October | 0.001 |
0.008 |
0.011 |
0.011 |
0.009 |
|
| November | 0.001 |
0.005 |
0.012 |
0.015 |
0.015 |
0.013 |
| December | 0.002 |
0.006 |
0.013 |
0.016 |
0.016 |
0.014 |
The Nil entries in the table below were correctly reported as "Nil" or zero in the original tables.
| Expenditure in 2001 |
Disposals in 2002
|
||||||
|---|---|---|---|---|---|---|---|
| Jan | Feb | Mar | Apr | May | June | July | |
| May | Nil |
Nil |
|||||
| June | Nil |
Nil |
|||||
| July | Nil |
||||||
| August | Nil |
Nil |
|||||
| September | Nil |
Nil |
Nil |
||||
| October | Nil |
Nil |
|||||
| November | Nil |
||||||
| December | Nil |
||||||
| Expenditure in 2001 |
Disposals in 2002
|
||||||
|---|---|---|---|---|---|---|---|
| Jan | Feb | Mar | Apr | May | June | July | |
| May | Nil |
Nil |
Nil |
||||
| June | Nil |
Nil |
Nil |
||||
| July | Nil |
Nil |
|||||
| August | Nil |
Nil |
Nil |
||||
| September | Nil |
Nil |
Nil |
Nil |
|||
| October | Nil |
Nil |
Nil |
||||
| November | Nil |
Nil |
|||||
| December | Nil |
Nil |
|||||
| Expenditure in 2002 |
|||||||
|---|---|---|---|---|---|---|---|
| Jan | Feb | Mar | Apr | May | June | July | |
| Jan | |||||||
| Feb | |||||||
| March | |||||||
| April | |||||||
| May | Nil | Nil | |||||
| June | Nil | ||||||
We corrected the error and published revised tables on the website on 20 September 2002.
What is the Inland Revenue doing to ensure taxpayers do not lose out?
- Companies which have already submitted a tax return
We will identify tax returns that have been submitted that include a disposal where the indexation allowance has been calculated using the wrong indexation factor.
We will write to the company (or its agent) to let it know. We will ask it to write back with an amended figure.
- Companies which are going to submit a tax return
When we check returns received in the future we will look out for cases where indexation allowance was calculated using the wrong indexation factor.
Companies which have already submitted a tax return
You do not have to do anything to find error cases. The Inland Revenue will write to you if we find that a tax return contains a calculation based on the wrong indexation factor.
If you believe you have made a tax return using an incorrect indexation factor, and you have not heard from us by the end of December 2002, please contact your tax office.
If you prefer, then if you know that you have used the wrong indexation factor you can write to your tax office now with the replacement calculation.
Companies which have yet to submit a tax return
Please ensure that you use the revised indexation tables that are now on the website if you have made disposals in the period February to July 2002.
What should I do if I did not realise in time that this affected my company?
If you have not discovered the error within the normal window for amending returns, you can make a claim for 'error or mistake relief'.
Under section 54 of the Taxation of Chargeable Gains Act 1992, no indexation factor is applied if it is less than zero.
So when the movement in the retail prices index was negative, we over-rode the formula for calculating the indexation factor and showed the word 'Nil' instead.
When we updated the spreadsheet for the following month's figures, we did not work out the indexation factor for cells where the factor had been nil in the preceding month.
We regret this mistake.
We have changed the spreadsheet used to create the tables each month. Now the formula is not over-ridden and 'Nil' entries are generated automatically.
We have also re-written the operating instructions that accompany the spreadsheet.
Where can I get more information?
Please contact your tax office for help in your particular case.
If you have general comments on this notice, please contact us via FEEDBACK.
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