Loss carry-back claims and Corporation Tax refunds

SimpleCompanyTax#Simple CompanyTax files your entered carry-back amount in the loss-period computation, ticks CT600 box 45 and reduces the loss carried forward. HMRC applies the claim to the earlier tax. You supply your calculated claim amount.

1. Make the claim in the loss-period return

Before starting, prepare the trading loss after tax adjustments, other profits for the loss period, and the amount you want to carry back against eligible earlier profits. This is your calculation. You do not need to upload evidence to enter it.

1. Open the filing for the period in which the loss arose. If it was already filed with us, start an amendment of that loss-period return.
2. On Financial Data, enter your prepared figures, including any other income. Open Tax adjustments.
3. Enter Trading loss carried back under the relevant return dates. The field appears when the preview has an unused trading loss, or when a claim amount is already entered. Blank or 0 means no carry-back claim.
4. Check Claim or relief affecting an earlier period. A positive amount ticks this automatically. A manual tick on its own does not add a trading loss claim statement.
5. Complete the remaining figures and open Review & file. Use Preview your documents (free) to check the CT600 and computation before authorising and submitting.

The claim is limited to this return's trading loss after current-period relief. Brought-forward losses use their own box 285 controls. Read the box 45 option guide for a complete worked wizard example.

2. Accounts longer than 12 months

An accounts period ending more than 12 months after it starts, even by one day, produces two CT600 returns. Enter a carry-back amount for each return that made a loss. The controls show their dates. The claim is your per-return instruction, so it is not divided by days. A claim belongs to its own return's dates. Switching to File only the remaining CT600 keeps return 2's own amount.

In separate-figures mode, enter the amount on that return's tab. Return 1's unused loss after its carry-back is carried into return 2 through the normal loss calculation.

A return 2 claim against return 1's profits does not lower return 1's tax in this filing preview. HMRC gives effect to the claim after processing it. We do not amend the receiving return or tick its box 280.

3. Show a prepared repayment in your accounts

If your prepared accounts recognise an expected Corporation Tax repayment, enter your own amount in Expected Corporation Tax repayment within the repayment section. It is included in Current assets and shown as a tax credit in the profit and loss account. Do not add it again to the Current assets figure.

This accounts entry is separate from the carry-back amount and does not calculate or submit the claim. Its confirmation concerns your prepared accounts. A taxable club supplies its own accounts and does not use these company accounts controls.

4. How carry-back works

Carry-back uses a loss against earlier profits. Carry-forward retains the unused loss for later accounting periods. Under CTA 2010 section 37, relief against the loss period's own profits comes first. A carry-back then uses profits in the 12 months immediately before the loss period, starting with the latest eligible period.

Fictional example. Willow Lantern Ltd has a trading loss of £24,000 and interest of £3,000. Its customer enters a carry-back of £15,000. After current-period relief and that claim, the loss carried forward is £6,000. Corporation Tax for the loss period is £0. The earlier repayment is a separate HMRC calculation.

5. A loss does not guarantee a refund

You need eligible earlier profits for the carry-back to relieve. There may be no cash refund if no earlier tax was paid, or HMRC uses the adjustment against an outstanding liability. The current return's tax and the expected earlier-period repayment are different figures.

6. Check the filing documents

• Box 45 shows X on the loss-period CT600 with the claim.
• The computation states the company or organisation name, loss-period dates, amount and the preceding 12-month use under section 37(3)(b).
• The same amount appears as trading loss carried back in the loss summary. Closing losses fall by that amount.
• Box 780 still reports the whole trading loss arising in that return. It is not the closing loss pool.

7. Deadlines and conditions

A section 37 claim is normally due within two years after the end of the loss period. A claim made in a return can normally be amended up to 12 months after the statutory filing date. A separate written claim is also possible. Check the applicable deadline and HMRC's late-claim rules for your circumstances.

The same trade must have been carried on in the earlier accounting period. A trade carried on wholly outside the UK cannot qualify under section 37. If an earlier accounting period falls partly within the preceding 12 months, only the relevant part of its profits is available. Special restrictions and relief ordering can apply. Read the complete statutory conditions and HMRC guidance when preparing your claim.

8. Terminal loss claims

When a trade ends permanently, the three-year terminal loss extension under section 39 may be available. This field files the preceding-12-month section 37 claim only. Claim the three-year extension with HMRC.

9. Filing scope

Original and amended loss-period returns are supported for limited companies and taxable unincorporated clubs or CASCs. A partial-exemption CASC enters losses from taxable activities only. For a mixed CASC with one taxable return, only that dated return carries the claim. Fully exempt returns have no carry-back control or computation.

We file the claim you enter. We do not work out the repayment, amend the earlier return, submit terminal extensions, or collect repayment bank details in boxes 920 to 940. You remain responsible for the figures and treatment.

Official sources

• HMRC: trading losses and claim deadlines
• HMRC CT600 guide: box 45
• CTA 2010 section 37
• HMRC CTM04510: preceding periods
• HMRC CTM04580: claims

This is general filing guidance. Your claim amount and any tax or accounting judgement are for you or your adviser.