If your company incurs a loss in its final twelve months of trading, you could make a claim for a special form of relief.
Terminal losses
A company which suffers a loss in its final twelve months of trading can carry back certain losses for 36 months against profits of the same trade rather than the normal twelve months. These are known as terminal losses.
Amount of loss
The terminal loss is calculated as:
If either of the amounts above is a profit, it is excluded from the calculation of the terminal loss.
Exclusions
The terminal loss rules do not apply if:
Claiming
The following information should be provided to HMRC in making a claim:
The time limit for terminal loss relief is two years from the end of the accounting period when the loss was made. HMRC has the power to extend this time limit in exceptional circumstances.