SolvedCTM92253 | Corporation Tax self-assessment (CTSA): the payment obligation: carry-back of trading losses or non-trading deficit - late payment interest - example 3
From HM Revenue & Customs · Company Taxation Manual
| Accounting period 01/01/2008 to 31/12/2008 | Accounting period 01/01/2010 to 31/12/2010 | |
|---|---|---|
| CT profit | £40,000 | Trade loss £20,000 |
| CT liability | £10,000 | CTA2010/S37 claim, as extended by FA09/Sch 6, to carry back to accounting period ended 31/12/2008. (No profits for the accounting period ended 31/12/2009.) |
| DTR | £ 8,000 | |
| CT payable paid by due date | £ 2,000 |
| Calculation | |
|---|---|
| Liability after carry-back becomes profit | £40,000 |
| Less loss carry-back | £20,000 |
| Profit chargeable to tax | £20,000 |
| Tax @ 25% | £ 5,000 |
| DTR | £ 5,000 |
| Tax payable | Nil |
The £2,000 CT paid is repayable.
The carry-back has no consequences for late payment interest. Although the DTR has been displaced by a carry back of losses with a later effective date of payment, no additional amount of CT would have carried interest if the claim had not been made. However, COTAX will incorrectly charge interest in such a case. See COM50090 for the action to take.