Where a company makes a trading loss of no more than £200,000 in an accounting period it is now possible to claim relief for that loss even though the corporation tax return CT600 has not been submitted.
This will enable the company to carry back the loss to earlier years and obtain a repayment of tax previously paid.
You will need to supply supporting evidence of the loss to support your claim to HMRC. In particular, a PDF of the company’s management accounts for the period.
To determine whether the loss is no more than £200,000, the company is required to claim all available reliefs, in particular capital allowances.
Where companies are members of a group the £200,000 limit applies to each individual company. Note that for members of a group the £2,000,000 limit on the temporarily extended carryback applies to the group as a whole. The extended carryback allows companies to carry back trading losses two further years in addition to the normal one year carryback.
We can of course advise you on the best use of trading losses.
Losses carried back will result in a repayment of corporation tax at 19% whereas if carried forward against profits the losses may save tax at up to 25% after April 2023.
If you have any questions regarding claiming your company loss, please contact us.
August 2nd, 2021