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S64 carry back losses

Making a 2007 ITA s64 carry back loss claim

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Hi

I have a partnership client who's year end is 31/10/2020 and made losses of £300,000. For the previous year ie 31/10/2019 they had profits of £350,000 and so we want to make a s64 claim and carry back these losses to 2019/20.

I am struggling with the actual mechanics of making the claim. In the 2021 tax return, just recently filed, I have included the £300,000 losses in box 23 of the partnership page of the return and made reference in the 'Any other information' section that the client is making a s64 claim.

HMRC have processed the return and reduced the 2020/21 liability to £Nil but  no action appears to have been taken on the s64 loss claim as the clients account is still showing tax due for 2019/20.

Have I missed something here in the mechanics of making the claim?

I would be grateful for a steer on this one if anybody can advise.

Many thanks

Replies (15)

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By Not Anonymous
17th May 2021 22:02

A loss carry back won't normally alter the actual liability of the earlier tax year so the amounts due for 2019/20 wouldn't change.

But the client should receive a credit based on the relief due. This can leave them owing interest and late payment penalties if they didn't pay the tax actually due for 2019/20.

Did you calculate the relief due and include that in the relevant box on the 2020/21 return?

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Replying to Not Anonymous:
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By gbolton
18th May 2021 11:51

I included the losses to be carried back in box 23 in the individuals partnership section on their return.

As you say both partners have now received penalties in respect of unpaid 19/20 tax. I have appealed but no response from HMRC as yet.

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Replying to gbolton:
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By Not Anonymous
18th May 2021 16:19

gbolton wrote:

I included the losses to be carried back in box 23 in the individuals partnership section on their return.

As you say both partners have now received penalties in respect of unpaid 19/20 tax. I have appealed but no response from HMRC as yet.

Not sure what you have to appeal against. A loss carry back won't have any impact on the tax due for 2019/20.

Not convinced you have quite grasped the reality of how this works and that it makes no difference whatsoever to the clients tax liability for 2019/20.

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By frankfx
17th May 2021 22:05

https://kb.taxcalc.com/2130

Let us know if the foregoing assists.

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Replying to gbolton:
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By frankfx
18th May 2021 10:22

OP

What software are you using?

Presumably it has a knowledge base similar to the Tax Calc I shared earlier, Monday 17th.

Please kindly share it's solution, if only that Awebers can check out the quality of " support''.

Thank you.

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Replying to frankfx:
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By gbolton
18th May 2021 11:47

Am using PTP, possibly not the best solution.

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By Michael Davies
18th May 2021 09:58

Good luck with this.In my naivety I submitted the claim in the white space and as an attachment,when I submitted the return last August.I did actually manage to get through to HMRC last autumn,who told me that white space entries and attachments were ignored by the algorithm.The Operative said he would transfer the claim to Tech Section,who would ring me back.,within two working days-nothing doing .Complaints told me to enter the total refund due on the tax return.Did that.Current year overpayment processed,nothing on back years.Submitted two letters outlining the loss claim,one to Complaints ;still no response.We are now getting on for nine months since first submitting the claim.

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Replying to Michael Davies:
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By Not Anonymous
18th May 2021 11:08

Michael Davies wrote:

Good luck with this.In my naivety I submitted the claim in the white space and as an attachment,when I submitted the return last August.I did actually manage to get through to HMRC last autumn,who told me that white space entries and attachments were ignored by the algorithm.The Operative said he would transfer the claim to Tech Section,who would ring me back.,within two working days-nothing doing .Complaints told me to enter the total refund due on the tax return.Did that.Current year overpayment processed,nothing on back years.Submitted two letters outlining the loss claim,one to Complaints ;still no response.We are now getting on for nine months since first submitting the claim.

Pretty sure amending the return doesn't produce an automated result

https://www.gov.uk/hmrc-internal-manuals/self-assessment-manual/sam71161

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Replying to Michael Davies:
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By gbolton
18th May 2021 11:46

I originally wrote to HMRC back in January this year, submitting the claim and advising them of the reduction in tax in respect of 2019/20. Never received a reply.
Have tried to call them on two occasions but have been unable to get through.

Difficult to know where to go from here.

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By Tax Dragon
18th May 2021 12:09

The tax relief (as The Dullard has explained) is provided by way of a standalone (HMRC uses the word 'freestanding' - see SACM11040) credit for 2020/21.

One issue you appear to have overlooked is the capping of the relief at £50,000 per partner.

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Replying to Tax Dragon:
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By Hugo Fair
18th May 2021 16:43

Except that the Dullard (or at least his post and and all subservient posts here) has been expunged! Which, as noted before, leaves some posts orphaned & adrift.

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Replying to Hugo Fair:
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By Tax Dragon
18th May 2021 17:19

Maybe Sift edits HMRC manuals, which is why SACM11020 is also orphaned and adrift. (Is that just me? Can you try please? It's really odd!)

If I'm honest, Dulls basically wrote what I thought when I saw the question (possibly putting some additional fruit flavours into the mix). Mind you, I think we both probably misread the question slightly. And I still don't know whether the OP is acting just for a partner, or whether the loss described is the loss for the partnership. (I've decided I don't speak OP.)

@OP: have you seen box 15 on page TC2? Have you seen HS204 and the associated working sheets? When you wrote to HMRC in January, did you include a valid s64 claim and provide details of the tax adjustment? Etc.

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Replying to Tax Dragon:
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By Tax Dragon
18th May 2021 17:30

@OP, I take it from your comment at 11:46 that the answers are "yes".

If so, my reading of SACM11040 is that the EDP of the tax credit is 31.1.21 and that it could therefore be set against the 2019/20 tax (SACM11020 talks about relief by set-off - this comes straight from Sch1B). So I disagree with some of the replies you have had that say otherwise.

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Replying to Tax Dragon:
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By Hugo Fair
18th May 2021 19:23

As I'm sure you knew, it's not just you.
SACM11020 is not just orphaned and adrift ... it appears to be cast out and wailing in the wilderness!

It's not merely missing from the Contents listing of SACM11000, it's even (when you manage to find and load the page despite being placed in this obscurity) missing any relevant Path statement for Contents > ... which should give you a shortcut to SACM11000 (and from there, to complete the circle, list the sub-pages including SACM11020 - which as we've established is missing in action).

If you can follow all that, which could've been better written by me but is logically consistent, then you are doing better than whoever at HMRC maintains the pages!

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By Tax Dragon
18th May 2021 12:14

I have pointed you to SACM, but actually the most useful page for you does not appear in the contents pages. Something is broken.

Try this link: https://www.gov.uk/hmrc-internal-manuals/self-assessment-claims-manual/s...

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