When applying, you should list the grades you achieved, and list a "pending" grade for any subject you are retaking as well. This shows the university you are retaking and these aren't your final grades. Ideally, you should have new predicted grades for these subjects in your reference. Universities may think going from a C to an A is unrealisitic.
Then, you should use your predicted grades like last year, so applying for 1-2 risky places, 2 places in line or slightly lower than your predicted grades and 1-2 safe places. Remember that some very top universities (like Imperial) aren't keen on people taking a whole year to retake, so check university websites to make sure they are happy with you taking A levels over three years. Be realistic with yourself and what you think you can achieve- there's not much point in having an offer you can't reach. Do you know what went wrong last time?
Also, remember your personal statement is not the place to dwell on what went wrong last year- this is something your referee should do if it's needed. You should be positive about the course and talk about what you want to do in the future as normal.