Claim to carry back company trading loss

When your company makes a loss the amount is carried forward by default and will be used to offset total profits in the future. Use our claim to get immediate relief for company trading losses.

Companies

There are a number of conditions that must be satisfied, including that the trade must continue, and not become negligible. Since 1 April 2017 there has been a restriction on the amount of profits that can be offset in a single accounting period, but this doesn’t affect profits under £5 million.

Total profits

By virtue of s.37 Corporation Tax Act 2010 a claim can be made to offset the loss against total profits of the company.

This means that if there is a trading loss, but the company has, for example, property income profits, it can be offset if a claim is made. The problem is that small trading companies are unlikely to have significant other profits to offset. However, that isn’t the end of the story.

S.37 also permits a company to offset its total profits in the accounting period prior to the one the loss arose in, i.e. it can carry back the loss. Since total profits include any trading profits, you could make a claim if you had a profit in the period immediately preceding the loss-making one.

To use this option, the company must have been trading in at least some part of the previous period, so if there was no trading activity but there were other profits, you can’t make a carry back claim.

Claim

You would usually claim relief on your company tax return, but if you have already submitted it, for example if you were originally carrying the losses forward, use our claim letter to revise the position and obtain relief now.

Time limit

A claim must be made within two years of the end of the accounting period you made the loss in.