COM80037 | Interest: how interest is calculated: interest on carry-back / S458 CTA 2010 (formerly S419(4) ICTA 1988) relief (Action Guide)

From HM Revenue & Customs · COTAX Manual

This page is currently under review

To ensure interest is calculated correctly on amounts in respect of ACT (Advanced Corporation Tax), trading losses and non-trading deficits carried back and claims under Section 458 Corporation Taxes Act (CTA) 2010 (formerly S419(4) Income and CorporationTaxes Act (ICTA) 1988), consider steps 1 - 7 below.

The guide is presented as follows.

HMRC Payments action on receipt of form CT250(P)	Steps 1 - 3
Where the Accounting Period (AP) is subject to clerical pursuit at the Debt Management Office	Steps 4 - 5
Where the AP is subject to clerical pursuit at the CT Unit Cumbernauld	Steps 6 - 7

HMRC Payments action on receipt of form CT250(P)

Use the information on form CT250(P) or memo to determine the effect of the displacement of a relief or Section 458 Corporation Taxes Act (CTA) 2010 relief on interest. To do this you may need to use functions VPPD (View Payment and Posting Details) and DASS (Display Assessment Details).
Use function RMIC (Raise Manual Interest Charge) to charge the correct amount of interest. See the action guides at COM80034 and COM80085 for more information.
You must not amend the interest charge for carry-backs or S458 CTA 2010 relief unless you hold form CT250(P) and have obtained authority on form AZ44.
Use function IINT (Issue Interest Computation) to issue an interest computation to the company and/or the agent.

Where the Accounting Period (AP) is subject to clerical pursuit at the Debt Management Office

4. Where the pursuit status is LA, LA-ENF or PLA, HMRC Payments must telephone the Debt Management Office immediately the interest position is correct.

5. When the Debt Management Office receives that information, they must resume normal collection action for the outstanding liability.
Where no interest charge is appropriate, delete the case from CIIW (Clerical Interest Indicator Work List’ or CDIW (Credit Interest Indicator Work List).

Where the Accounting Period (AP) is subject to clerical pursuit at HMRC Payments

6. Where the liability remains unpaid seven days after issuing the interest computation, use:

function RAPP (Revise AP Pursuit) to amend the Pursuit Status to LA
function NOTE (Case Notes) to note payment applications issued and the reason why the case is being made local action

7. Where the AP remains overpaid, HMRC Payments must contact the CT responsible office and ask them to deal with the overpayment.
BF the entry on LOPU (Overpayment Review List) to ensure the overpayment is cleared.