How to claim for a trading loss to be carried back

You can make a claim to carry back a trading loss when you submit your Company Tax Return for the period when you made the loss. Your claim should normally be made in your return or in an amendment to a return.

if you are making a claim in your return that reduces your Corporation Tax liability for an earlier period, you must make sure you have put an ‘X’ in the appropriate box on the CT600 form. This will alert HMRC to your claim and they can process it correctly.If you're too late to make your claim in your return or return amendment for an accounting period, you can make your claim in a letter. A claim should be made within two years of the end of the accounting period when you made the loss. Your claim should include:

the name of your company or organisation

the period when the loss is made

the amount of the loss

how the loss is to be used

If you send your claim separately, send it to your Corporation Tax Office.

You can amend your claim in the same way as you can amend your return - see the link below for more information.

If HMRC doesn't carry out a compliance check into your return or stand alone claim, or any later amendment, then the amount of the loss becomes final. But HMRC can ask about the usage of the loss in a future return - for example, to check whether the same trade is still being carried out.

If you're offsetting a loss against an accounting period where you've already paid the tax due, HMRC will send you a repayment. However, if you owe any Corporation Tax, this will be deducted from the payment first.

If your company or organisation stops trading, you may be able to claim Terminal Loss Relief. This allows you to carry back any trading losses that occur in the final accounting period to be set off against profits made in any or all of the previous three years. But for each year, you can only offset the loss against the profits in that year if your company or organisation was carrying on the same trade at some point in the accounting period or periods that fall in that year.

f the accounting period end date has changed, or any of the preceding accounting periods in that three-year period are less than 12 months, then you'll have to apportion the profit. The loss can only be offset against that portion of the profits falling within the three-year period.

HMRC has announced measures to prevent companies getting Terminal Loss Relief when the trade is transferred to another person and the sole or main reason for that transfer is to get Terminal Loss Relief.