Where to enter a brought-forward non-trading loan relationship deficit

Short version. In your filing, open Step 2, go to Tax adjustments and use Non-trading loan relationship deficits brought forward. Enter the unused qualifying balance from earlier accounting periods. Do not enter it as a trading loss or add it to this year’s interest expense.

1. Where to enter it

1. Open your draft filing and go to Step 2.
2. Find Tax adjustments and the field labelled Non-trading loan relationship deficits brought forward.
3. Enter the qualifying unused balance at the start of the accounting period, in whole pounds.
4. Review the claim and deductions allowance directly underneath the field.
5. Continue to review your tax calculation and filing documents before approving the return.

2. Which balance to use

Use the balance available for relief against total profits, taking account of amounts already used, surrendered or affected by amendments. Your previous Corporation Tax computation should help you identify it. The amount originally arising in an earlier return is not necessarily the amount still available.

Do not enter the loan principal, retained losses in your balance sheet, this year’s interest expense or a deficit already included in trading losses. Read what a non-trading loan relationship deficit means if you are unsure which category applies.

3. Claim and deductions allowance

The brought-forward balance and the claim are different figures. The balance is what is available. The claim is how much you choose to use on this return.

Leave the claim blank to use the maximum shown by the calculation. Enter a smaller amount to claim less, or enter 0 to make no brought-forward claim on that return. Unused eligible amounts remain in the carry-forward balance.

Check the company deductions allowance shown for each return. The standard non-group allowance is £5 million for 12 months, reduced for a shorter accounting period. A group company may have a different allocated allowance. The suggested amount is a starting point, not confirmation of your company’s entitlement. Enter the amount your company is entitled to state.

This feature supports claims where the stated allowance covers the relevant qualifying profits. It does not calculate the wider restriction on carried-forward losses where that condition is not met. If you see an allowance message, check the amount. Do not increase it just to clear the message.

The company allowance is shared with other relevant loss streams. The updated customer-calculated capital loss relief controls use the same company allowance, not a second allowance. Entering a capital loss calculation does not override a restriction on loan deficits.

4. Long accounting periods

If your accounts cover more than 12 months, the inline splitter under this field shows the two Corporation Tax returns and their dates. Review the claim and allowance for each return separately.

Enter the opening balance only once. We carry the unused balance from the first return into the second, together with any eligible unused non-trading deficit arising in the first return. We do not divide the opening balance by the number of days or give both returns the full opening balance.

For example, an opening balance of £8,000 with a £3,000 claim on the first return leaves £5,000 for the second, assuming no new deficit arises. A £2,000 claim on the second then leaves £3,000 to carry forward. The two claims do not have to use the full £8,000.

If you change your accounting dates, review the claims and allowances again. A claim of zero means no claim, not “use the maximum”.

5. Why is my maximum claim £0 when a balance remains?

The balance has not disappeared. “Available brought forward” is the unused deficit entering that return. “Maximum claim” is how much of it the calculation allows you to use against that return’s remaining profits.

In a completed calculation, a positive balance with a £0 maximum means there are no profits left against which to use this brought-forward deficit after other reliefs. Having turnover does not necessarily mean there are profits available for this claim. Check the calculation and correct any validation messages before relying on the maximum shown.

For example, suppose your opening balance is £90,000 and Return 1 can use £3,580. Leaving its claim blank uses that maximum, so £86,420 passes to Return 2. Entering 0 in Return 1 instead passes the full £90,000 to Return 2. These examples assume no new deficit arises or other changes affect the balance.

Return 2 can still have a £0 maximum if it has no remaining profits against which to claim. Its claim input is not the amount carried into it. Look at “Available brought forward” to see that balance. Increasing the balance does not create profits. Unused eligible deficits can continue to later periods under HMRC’s carry-forward rules.

6. What happens if I claim zero in both returns?

Enter an explicit 0 in each claim field to make no brought-forward deficit claim in either return. Neither return then receives a tax reduction from that existing balance.

If the opening balance is £90,000, claiming zero in both returns leaves that existing £90,000 unused beyond Return 2, assuming no other changes to it. Any eligible unused deficit newly arising in either return is calculated separately and can also affect the closing balance.

Keep the final computation and use its closing balance when preparing the next return. A later claim depends on the deficit remaining eligible and on the profits and relief limits in that later period. Carrying forward a balance is not a tax refund or a guarantee that it can all be used next time.

Zero and blank are different. Zero means claim nothing. A blank field, including one showing a grey maximum figure, tells our software to use the calculated maximum. That automatic choice is our software default, not a requirement to claim the maximum.

7. Review your return

Check the opening balance, deficit arising, relief used and closing balance in the computation. The claim for an eligible brought-forward deficit against total profits goes in CT600 box 263. Current-period deficit relief is separate, in box 260. Box 795 reports the deficit arising in that return, not the accumulated carry-forward balance.

Keep the final computation with your records so that the closing balance can be used when preparing the next return.

8. Supported claims and HMRC guidance

Use this field for eligible post-reform deficits available against total profits. It does not support pre-1 April 2017 or other restricted deficits that must be used against non-trading profits through box 230. Carry-back claims and group-relief surrenders are also outside this feature.

• HMRC: carry-forward rules and restricted deficits
• HMRC: deductions allowance for a company not in a group
• HMRC: when the allowance covers qualifying profits
• HMRC: Company Tax Return guide and box explanations

We provide filing software and rely on the figures you declare. This article is general guidance, not advice that a particular deficit qualifies. Ask a qualified tax adviser if you cannot establish the available balance or its tax treatment.