How to carry back corporate losses

If your company suffered badly under the Covid-19 pandemic you can at least claim a tax repayment where the accounts show a loss and the company made profits in earlier years.


How to carry back corporate losses

If your company suffered badly under the Covid-19 pandemic you can at least claim a tax repayment where the accounts show a loss and the company made profits in earlier years.

Where the loss exceeds the profit made in the previous year, the excess loss can be carried back to set against profits from the two preceding years. This extended loss carry-back only applies to losses arising in accounting periods that end between 1 April 2020 and 31 March 2022. The amount of losses that can be carried back is capped at £2m per year of loss.

In certain situations you do not have to wait until the corporation tax return is finalised for the loss period to make a claim. Claims for the two earliest years exceeding £200,000 must be made in the corporation tax return.

HMRC has opened an online portal to claim those corporate losses and we can help you make that claim. Ideally the finalised and approved company accounts would be submitted with the loss claim but if final accounts are not available management accounts for the loss period will do.

Where the company is part of a group a nominated group company must submit a written loss carry-back allocation statement showing which companies in the group are claiming the allowable losses.

At B20 Wessex we are Chartered Certified Accountants with years of experience in advising businesses on how to maximise their company tax savings.

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