S419 claimback

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acsacsacs
acsacsacs Registered Posts: 43 Regular contributor ⭐
I have recently aquired a client who has paid back £2,000 of his directors loan.

Obviously he has previously paid S419 tax and now we can claim back the element of this with regards to 419 tax.

I am sending off the latest tax comp and workings and just wanted to check if I have to write to the revenue separately to claim this back or if i have to complete form CT600a

I presume I complete section 3 of the CT600a with a £2,000 repayment, and then obviously calculate the 25%.

Many thanks in anticipation

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  • jilt
    jilt Registered Posts: 2,903 Beyond epic contributor 🧙‍♂️
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    It depends on what date the loan was repaid. Have a read through the notes in sections 2 and 3 of the CT600a and www.hmrc.gov.uk/ct/managing/director-loan.htm#7
  • acsacsacs
    acsacsacs Registered Posts: 43 Regular contributor ⭐
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    Cheers Jilt, I'll have a look.

    Basically the situation was

    at 30/06/2008 - Loan account was £7,137

    30/06/2009 - Loan account was £5,437 because a dividend was authorised.

    The previous accountant submitted and paid S419 tax on the £7,137 for the 30th June 2009 return, although the balance was £5,437 at the 30th June 2009.

    So for the 30/06/2010 return (which i am doing) - The balance is £5,437

    If this makes sense.
  • jilt
    jilt Registered Posts: 2,903 Beyond epic contributor 🧙‍♂️
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    acsacsacs wrote: »
    Basically the situation was

    at 30/06/2008 - Loan account was £7,137

    30/06/2009 - Loan account was £5,437 because a dividend was authorised.

    The previous accountant submitted and paid S419 tax on the £7,137 for the 30th June 2009 return, although the balance was £5,437 at the 30th June 2009.

    So for the 30/06/2010 return (which i am doing) - The balance is £5,437

    If this makes sense.

    I thought I was ok with s419 but your post has made me question this. This my understanding but I would like someone else to clarify:

    Firstly if the loan was advanced in year ended June 2008 then the s419 tax should have been included in the tax return for that year not the following year, unless I've misunderstood your post.

    If loan was advanced in year ended 2008 then the partial repayment would be repayable from 1st March 2010:
    Loan - year ended 30/06/08
    Partially repaid - year ended 30/6/09
    Refund of tax available 9 months after the end of the accounting period the partial repayment was made - from March 2010

    If if it was made in 08/09 and the partial repayment made in the same year then s419 tax would be payable on the net amount £5437.

    And, if the loan was actually made in year ended 30/06/08 do the tax returns for 2008 and 2009 need amending and is interest payable on the late s419 tax?

    Dean help!
  • deanshepherd
    deanshepherd Registered Posts: 1,809 Beyond epic contributor 🧙‍♂️
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    Interesting!

    I have never had an active trading company that had no movement on the DLA from one year to the next.

    However, there is nowhere on the CT600 to claim the repayment. You need to write in separately. Assuming the DLA did stand at £5,437 on 30/06/09 then, yes, partial refund of s.419 tax (now s.455 CTA 2010) would have been claimable from 31st March 2010.
  • Tracy_Rutherford
    Tracy_Rutherford Registered Posts: 19 New contributor 🐸
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    I'm currently doing this for one if my clients. If the money is paid back under 24 months you can amend the ct600. If paid back after 24 months the you need to write a letter. I have to write a letter as my clients a/p was jan 31 2008 and they have just paid the loan back this february.
  • acsacsacs
    acsacsacs Registered Posts: 43 Regular contributor ⭐
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    Thank for your help everyone.

    So I take it submit the latest accounts, tax comp, etc. as normal for the year 30th June 2010, and then I need to write to the revenue detailing the amounts repaid and the potential tax refund. And form ct600a doesn't need to be completed for this year as there has been no movement.

    I have never done this before so is there any standard letter someone could point me too?

    Or will just a straightforward letter suffice, will all the details/references etc.
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