Share this content
0
582

CT loss carry back help

Have I done something wrong?

Just wanted to check before I contact HMRC but I have a client who made a profit last year which resulted in a tax bill of approx £10k they then unfortuntealy had a really tough year the year after and also bought some new equipment on finance which result in a CT loss that could be carried back reducing the previous year's tax bill to £2k.  I submitted the current year return and then submitted an amendment to the prior year return with the loss carried back however HMRC dont seem to have processed the amendment.

This is the first one that I have done in Taxfiler so just wanted to check to see if Ive missed anything.  The amended return was submitted within 12 months of the original filing date and I ticked the box to say it was an amendement.  Anything else I needed to do?  

Thanks.

Replies

Please login or register to join the discussion.

avatar
By thomas
09th Apr 2019 16:09

Call HMRC and ask if they need anything else. I've had one similar and it took forever to be processed.

Thanks (0)
09th Apr 2019 16:16

This was discussed recently.

You DO NOT amend the prior year return.

You note the current year return that there is a repayment due for an earlier period and then include a computation or pdf of the loss carry back.

It is incorrect to amend the previous year's CT600.

Thanks (3)
to JCresswellTax
09th Apr 2019 17:01

JCresswellTax wrote:

This was discussed recently.

You DO NOT amend the prior year return.

You note the current year return that there is a repayment due for an earlier period and then include a computation or pdf of the loss carry back.

It is incorrect to amend the previous year's CT600.

Interesting, I'll try and find the recent topic but I should have added in my post that the client did not pay the tax due so they need the loss to reduce the prior years bill as HMRC are chasing them for the balance due after they paid the correct amount.

Thanks (0)
to JCresswellTax
09th Apr 2019 17:04

I completely disagree with that - there is nothing incorrect in amending the previous year's return.

Think about it - the CT600 provides for losses brought back from a later period. Given that in almost all circumstances the earlier year's return will already have been submitted before the loss carry-back is identified, how would you propose to include that in the earlier return without amending it?

We always amend the earlier return and have never encountered any issues.

Thanks (2)
to Wilson Philips
10th Apr 2019 09:18

There is just no need to amend a return for an earlier period when the repayment can be generated by noting the current period return.

What do you do for terminal losses? Amend the last three tax returns?

What do you do for income tax self-assessment when you have a loss carry back? Do you amend the previous year's tax return? Of course you don't.

So why is CT so different when there is a one-year loss carry back?

Doesn't make sense!

Thanks (1)
to JCresswellTax
10th Apr 2019 10:00

There is a big difference between "It is incorrect to amend the previous year's CT600" and "There is just no need to amend a return ..."

CT is different when there is a one-year loss carry back simply because the system allows it to be done. In my experience, which may be different from others, amending the prior return expedites the repayment, because the revised figures automatically quantify and create the overpayment on the company record. Simply flagging the current return that a prior year refund is due requires someone to actually go and look at it and process it.

Thanks (0)
to Wilson Philips
10th Apr 2019 10:13

Yes, there is a difference, but I still believe it is incorrect to amend the return.

As I said (and you didn't comment on) you don't and shouldn't amend SA Returns for loss carry backs, nor do you ask to amend returns for terminal loss relief.

I still don't understand why anyone would think that CT is one exception to this.

Also, amended CT600's do not get processed automatically which is why everyone who amends the returns are having to chase up HMRC!

Thanks (1)
to JCresswellTax
10th Apr 2019 10:54

If it is incorrect to amend the earlier return perhaps you could explain why the box on the return exists?

The answer re terminal losses is simple - in most cases one will be out of time to amend the earlier (2) returns.

The answer re SA is also simple - the return does not contain an entry to bring back losses.

"I still don't understand why anyone would think that CT is one exception to this." I can't really explain my position any more clearly.

"Also, amended CT600's do not get processed automatically". That is not my experience.

I don't have a problem with people preferring one method over another. My objection is to the word "incorrect".

Thanks (0)
avatar
to Wilson Philips
10th Apr 2019 09:28

Don't think I've ever had a situation when HMRC has actually gone ahead & processed the amended return though. It always seems to require a prompt.

I find, from a practical point of view, it is much easier to get them to process if you just include it on the later return as suggested by JCresswell Tax.

Thanks (3)
09th Apr 2019 16:16

To be honest I don't file an amended return under those circumstances, but instead write a letter on rose-scented paper. It always works. (The rose-scented bit was a lie, but it's got me thinking.)

Thanks (1)
avatar
By Lisa02
09th Apr 2019 16:32

For one of the recent clients, on the current year tax, I completed the section setting off loss against prior year profit and entered the bank details to pay into. Plus couple of weeks later I called HMRC and explained that have set off the loss against last years profit. HMRC transferred the amount to the bank account mentioned.

Thanks (0)
avatar
By CJaneH
09th Apr 2019 17:06

I am interested in the comment by J Cresswell that you should not resubmit the earlier year when claiming loss for corporation tax.

Box 275 states trading losses of this or a later period. If you are submitting returns in time how can you put losses of a later period on the return, accept by resubmitting it?

Just checked on line refund processed for amended return claiming set back loss relief submitted 25.03.19

Thanks (0)
to CJaneH
09th Apr 2019 17:05

Great minds ...!

Thanks (0)
avatar
By Matrix
09th Apr 2019 18:09

You need to tick the box on the loss making return per J Cresswell to generate the repayment. This is what HMRC’s system uses, they told me this (but generated the repayment anyway manually, you could call up, this was years ago and I now just tick the box).

Thanks (2)
09th Apr 2019 18:31

I reckon about 50% of mine get missed by HMRC. I never amend the previous year but just warn the client to let me know if they haven't received the refund after a few weeks and I ring HMRC and get them to manually process the carry-back.

Thanks (0)
09th Apr 2019 18:35

We amend the old ones, mainly so I can check I worked out the refund right, so I may as well sent it too, but it makes little difference. Its seems to be a manual process at HMRC end.

I get my assistant to call them up after about 6 weeks, and then you normally get a date when its supposed to be processed. You then call up about a week after that, and someone says "oops I will do that for you" and then it comes out.

Waste of pigging time all round.

Tried writing, to little success.

Tried just waiting for HMRC to od it, and HMRC don't seem to do anything.

So back to calling them, usually 2 calls for each case. But you can often ask about some other ones while you are on. We always seem to have one or two on the list at any one time.

Thanks (0)
to ireallyshouldknowthisbut
10th Apr 2019 09:20

As you are aware, we don't amend the previous year.

We note the current year and the repayments are generated automatically without having to chase.

Thanks (2)
avatar
10th Apr 2019 10:46

wouldn't the main reason for not amending the return be to not extend the enquiry window?

Technically the prior year is not incorrect and the claim for the losses is being made in the current year so an amendment to the prior year is unnecessary (and dare I say incorrect in the circumstances) - but of course you are dependant on HMRC doing their job in the current year so can understand why you would take that action.

Thanks (1)
to justsotax
10th Apr 2019 10:49

The enquiry window is extended only in respect of the item being amended.

Thanks (0)
avatar
10th Apr 2019 13:53

I never used to amend the previous year and was always having to ring HMRC to chase the repayment. Upon the advice of our software provider I now always amend the previous year. I now rarely have to ring HMRC to chase the repayment.

Thanks (0)
to pdtaylor78
10th Apr 2019 16:40

Which would suggest that amending the prior period return is the 'correct' thing to do, despite claims to the contrary!

Thanks (0)
Share this content