Can you get s455 credit against CT liability instead of paying it?

Can you get s455 credit against CT liability...

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Limited Co client, ceased trading, owes £10k Corp Tax + £10k s455, mirrored by £20k overdrawn DCA. 

As you can see, he's reduced his overdrawn DCA already by £20k by paying CT out of personal funds.

My question is, if I tried to recover £5k of the s455 from HMRC now, presumably they would argue that it can't be repaid until the CT liability is cleared? Would they not simply agree to credit £5k against the £20k creditor?  

Presumably client would need to pay the entire £20k CT liability to HMRC first, then apply for £10k s455 to be refunded afterwards? 

I'm not too experienced with s455 as you can tell!

Thanks for any help

Replies (3)

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By chicken farmer
20th Jan 2015 10:29

Don't understand

In your second paragraph you say that the director has already paid the £20K CT out of personal funds and yet your first paragraph says that the CT due was only £10K and the s. 455 tax due was  also £10K (which doesn't stack up with a £20K overdrawn loan account). This suggests that both the CT and s. 455 have already been paid. So why in your third and fourth paragraphs do you suggest that the CT (now shown as £20K) still needs to be paid?

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Replying to AdShawBPR:
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By fellowcraft
20th Jan 2015 12:53

To clarify...

Sorry - you're right - I wasn't clear!

Prev year CT liability was £40k including £10k s455.  His OD loan was £40k.  He paid £20k this year. So his OD loan is now £20k and CT liability is £20k.

So he has repaid £20k of his loan therefore is due £5k s455 back.

 

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RLI
By lionofludesch
20th Jan 2015 13:09

Dates

I'm still not clear on the dates but, if you've a s455 repayment due on, say, 1 Jan 2015, you can set it off against the tax due on 1 Jan 2015.  You don't have to pay the tax to get the s455 repayment.

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