If your limited company incurs trading losses, you may be able to claim tax relief to reduce your corporation tax bill for the current, past or future accounting periods.
There are different ways to claim tax relief for trading losses depending on the type of loss and the timing of the loss. Here are some of the common ways:
– Carry forward losses: If your company incurs a trading loss in an accounting period, you can carry forward the loss to set it against profits of future accounting periods. There is no time limit on how long you can carry forward losses.
-Carry back losses: If your company incurs a trading loss in the current accounting period, you may be able to carry back the loss to set it against profits of the preceding accounting periods. The maximum amount you can carry back is the lower of the trading loss and the taxable profits of the preceding accounting period.
– Group relief: If your company is a member of a group, it may be possible to surrender its trading losses to another company in the same group to set against the profits of that company. The conditions for group relief can be complex and you should seek professional advice.
It’s worth noting that the tax relief for trading losses is subject to various restrictions and conditions, and you should seek professional advice to ensure that you claim the relief correctly.
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