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 available for relieving company trading losses.

Companies may have a number of potential options for relieving trading losses in a particular year, 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. Effective loss planning is particularly important when the rates of corporation tax vary from one financial year to another so that losses are relieved against profits which would otherwise be charged at the highest rates (or marginal rates) of tax. There is often more flexibility in this regard to a group scenario.

For more information, see the Loss planning guidance note, and a summary of corporation tax losses and the ways in which they can be used is set out