Carrying CT losses through dormant period

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Hello

Are you able to carry company trading losses forward indefinitely through any periods if you then declare the company as dormant?

Many thanks

Greg

 

 

 

Replies (10)

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By Bobbo
03rd May 2024 10:07

By "declare the company as dormant", do you mean the company has ceased the trade which generated the trading losses?

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DougScott
By Dougscott
03rd May 2024 11:27

You should be able to carry forward losses indefinitely to set against the same trade.

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By Paul Crowley
03rd May 2024 11:29

No.......ish
If you cease trading then the trade has stopped and the losses cannot be carried forward against the same trade.
If the trade has a bit of a gap, then do not treat it as ceased.
I would never submit dormant accounts if the company is still trying to continue its trade.

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Replying to Paul Crowley:
By Ruddles
03rd May 2024 12:13

I was about to 'challenge' your original response but agree wholly with this version ;¬)

Of course, the longer that "bit of a gap" becomes ...

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Replying to Ruddles:
Stepurhan
By stepurhan
03rd May 2024 15:43

The business isn't dead, it's just pining for the fjords. :-)

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Replying to Paul Crowley:
DougScott
By Dougscott
03rd May 2024 13:18

Surely if there is no work for that company but a few years down the line it wins a contract in the same line of work the company can still be "dormant" for a period. It's surely like a volcano - it doesn't erupt for a few years until BANG it's off again.....

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Replying to Dougscott:
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By FactChecker
03rd May 2024 14:26

Wandering off the accounting pathway, but I think your analogy may cause more confusion - as volcanos can be active or extinct (dormant being but a temporary phase of the former).

Volcanologists use the 'dormant' term as shorthand for “potentially active”; so a “dormant” volcano is one that is not erupting now, but is still considered “active” because it could erupt in the future.

I'm not convinced that CH or HMRC recognise such nuances, but Paul's 'bit of a gap' regarding a company trading/not-trading would in volcano terminology be seen as dormant (as opposed to extinct) and therefore still active!
No wonder everyone in accounting is a little uncertain ...

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Replying to Dougscott:
By Ruddles
03rd May 2024 14:39

Facts, facts, facts

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DougScott
By Dougscott
04th May 2024 08:06

To be fair on the odd occassion where I've had a client like that I've just filed a NIL CT600 with HMRC. Actually there are always some costs like bank charges, filing fees, accountancy, just to keep the company going.

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By GC700
04th May 2024 08:46

Interesting - we were planning to close the bank account, just so we wouldn't have charges, and we could declare as dormant. But then I guess it makes it harder to justify the 'gap in trade'. Yes, probably safer to declare nil CT600s, but then extra admin....

Thanks very much for your replies

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