Introduction to trading losses

By Tolley

The following Corporation Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

Introduction to trading losses
Summary of reliefs for trading losses
Other available loss reliefs
Anti-avoidance and trading losses

Company trading losses are computed in the same way as trading profits. Where the adjusted trading profit figure is a loss, the trade profit assessment in the corporation tax computation will be nil. This guidance note gives an overview of the different options for relieving company trading losses. Companies may have different options for relieving trading losses and it is important to consider the best utilisation of losses in light of the company’s commercial objectives and in choosing the option that gives the most tax efficient result. For more information on this, see the Loss planning guidance note.

Summary of reliefs for trading losses

Trading losses may be relieved in the following ways:

Relief	Notes	Guidance note	Legislation
Set against total profits in current accounting period	Relief before qualifying charitable donations Claim required	Current year relief and carry back losses	CTA 2010, s 37(a)
Carried back against total profits in the preceding 12 months