Carrying losses back by three years

The legislation in the Finance Bill at Schedule 6 is already in place as it relates to corporation tax accounting periods ending on or after 24 November 2008. So practitioners may now be ready to make claims to carry losses back under the new rules. This article looks at the carry back for companies, as the rules are significantly different for income tax.

Continued...

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Comments

Rate of tax changing mid year

Ian Lawrence | | Permalink

Please could you confirm - if the rate of tax changed during one of the profitable periods against which the loss was offset, the average tax rate is applied to the loss in order to calculate the tax repayment?

Many thanks

RebeccaBenneyworth's picture

Yes

RebeccaBenneyworth | | Permalink

As you would time apportion the profit after relief was given to get to Financial years and then apply the correct tax rates, this compound multiplication can be done in any order - so time apportioning the rates of tax gives the same result as apportioning the profits.

Many thanks

Ian Lawrence | | Permalink

Can claims be made yet?

Anonymous | | Permalink

Probably a daft question but as the Finance Bill is not yet an Act, can claims be made on CT returns yet (e.g. y/e Nov 2008 losses). My client is chomping at the bit!

RebeccaBenneyworth's picture

Yes, get em in

RebeccaBenneyworth | | Permalink

Claims were permitted from Budget Day (22 April 2009) as the Budget resolutions were put to the house that day and that covers us until Royal Assent. So yes, claim away - your only constraint is that the period producing the loss has ended. (Yours obviously has). For those where it hasn't use the Business Payment Support Service to set aside recovery of tax debts until a loss relief claim can be made which will hopefully wipe them out.

Corporation tax losses

dipesh121 | | Permalink

Under the the corpoation tax losses 3 year carry back, can I claim for a repayment if the accounting period has been extended to 17 months.

The loss for this period is 140,000

Previous year ends were as follows:

31/10/07 - Loss £3331 (c/b to 31/10/06)

31/10/06 - Profit £9542 (excluding loss c/b)

31/10/05 - Profit of £11010

 

Look forward to your comments

Thank you