SALF611 - Claims, Elections and Notices: claims given effect by a carry-back of a relief to an earlier year

Schedule 1B/Para 2(2)

The requirement to include a claim in a tax return does not apply where the claim is for a loss incurred (or treated as incurred), or a payment made, in one year of assessment to be given in an earlier year of assessment. For example, a carry back of relief for trading losses or qualifying pension payments.

This is because it is necessary to recognise that such a claim:

  • is established in one year (바카라 사이트˜the later year바카라 사이트™), but
  • is given effect by reference to the tax liability of a different year (바카라 사이트˜the earlier year바카라 사이트™).

In any such case the claimant has the flexibility to choose to wait to include the claim in the return for the later year, or to make an immediate claim through the Schedule 1A procedure. A claim made in 바카라 사이트˜a later year바카라 사이트™ does not interfere with the agreement of the liability of an earlier year, or extend the time limit for enquiries by 바카라 사이트˜re-opening바카라 사이트™ an earlier year. This maintains the principle that a tax return filed on the normal filing date for a year will become final within 12 months of that filing date (unless HMRC open an enquiry into the tax return), one of the underlying principles of Self Assessment.

All such claims are quantified by reference to the tax difference in 바카라 사이트˜the earlier year바카라 사이트™

Para 2(4)

The claim is quantified in terms of the tax difference in 바카라 사이트˜the earlier year바카라 사이트™. The tax 바카라 사이트˜difference바카라 사이트™ is the tax that would not have been due in 바카라 사이트˜the earlier year바카라 사이트™ if the claim could be and had been given effect to in relation to that 바카라 사이트˜earlier year바카라 사이트™.

Any such claim is to be given effect in 바카라 사이트˜the later year바카라 사이트™

Schedule 1B/Para 2(3) & (6)

However, the claim relates to the later year and is given effect in relation to 바카라 사이트˜the later year바카라 사이트™. This means that although the claim is quantified by reference to 바카라 사이트˜the earlier year바카라 사이트™ it is none the less a claim for the year in which the event occurs which gives rise to the relief (for example, the year in which the loss accrues or pension payments are made). The claim is given effect by repayment, set off or by increasing the aggregate amount of the payments on account and any income tax deducted at source. The claim does not revise or re-open the self assessment for 바카라 사이트˜the earlier year바카라 사이트™.

Repayment interest

ICTA88/S824(2C) & (3)(ab)

Whatever the means of giving effect to the claim, any repayment interest arising begins to run from the 31 January next following the year that is 바카라 사이트˜the later year바카라 사이트™.