Introduction to trading losses

By Tolley
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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:

ReliefNotesGuidance noteLegislation
Set against total profits in current accounting periodRelief before qualifying charitable donations
Claim required
Current year relief and carry back lossesCTA 2010, s 37(a)
Carried back against total profits in the preceding 12 months

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