SolvedCOM153030 | CT Pay and File: claims/reliefs: Advance Corporation Tax (ACT): ACT carry-back and repayment interest
From HM Revenue & Customs · COTAX Manual
Section 826(7) (S826(7)) Income and Corporation Taxes Act (ICTA) 1988
A claim to carry back surplus Advance Corporation Tax (ACT) may result in a repayment of CT or Income Tax for the earlier Accounting Period (AP) to which the relief is carried back. In such circumstances S826(7) provides that repayment interest is only payable from the due and payable date of the later AP in which the surplus ACT arose.
Example 1 illustrates such a case.
| Accounting Period (AP) 01/01/21 to 31/12/21 | AP 01/01/22 to 31/12/22 |
| Agreed and assessed liability of £50,000 | Surplus ACT of £10,000 |
| Paid £50,000 on the due date, 01/10/22 | Claims on 01/12/23 to carry back the ACT under Section 239(3) (S239(3)) Income and Corporation Taxes Act (ICTA) 1988 against profits of the previous AP |
A repayment of £10,000 is due to the company but repayment interest is only payable from 01/10/9623 (the due and payable date for the later AP) to the date of the repayment.
Repayment Interest - Carry back to pre CT Pay and File AP
If the ACT carried back is to an earlier period before the start of CT Pay and File repayment supplement is paid under Section 825 (S825) Income and Corporation Taxes Act (ICTA) 1988.
Repayment supplement is allowed as if it were a repayment for the AP in which the surplus ACT arose. For more information see Company Tax Manual at CTM20210.
See COM153031 For legislation applying to this subject.