Carrying trading losses backwards

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Hi,
I need some help please.
I am using freeagent to for accountancy and filing of accounts and everything was good untill i neede to carrytrading losses back. (freeagent doesn't support this scenario)
Acounting dates 01/01/2023-31/12/2023
Company made profit in the year end 31/12/2023 and need to pay CT (accounts wasn't filed yet)
Company will make loss in the year end 31/12/2024 (i would like to carry this losses backwards...it would be enough to set against profit from previous year and rest of losses would be carried forward to the next year)

  1. Do i need to file accounts for year end 31/12/2023 first and pay CT and then claim refund in next year end 31/12/2024?
  2. I asume i would need to file accounts on HMRC website using their online service because freeagent doesn't support losses to be carried backwards. I can get all figures from freeagent, amend relevant figures and input it on HMRC website. Can i have some guidance on how to please? (construction company with no complex scenarios)

Thank you

Replies (19)

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panda ketteringUK
By ketteringUK
16th Jun 2024 20:05

Like Adam Savage used to say 'Well, There's your problem'.

Best would be to engage with a reputable accountant. Not sure how can you submit tax return for the year in question before it actually ends (unless you shorten the year).

You might want to delay a payment due on 1st October or seek TTPA and then in January submit ct600 for the p/e 31/12/2024. As for FA - that's the thing - You get what you pay for...

Generally this forum is not a taxaid.org.uk and does not provide FOC advisory - Would you provide free service or product in your business to a random folk off the street or internet?

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Replying to ketteringUK:
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By romstav
16th Jun 2024 21:05

ketteringUK wrote:

You might want to delay a payment due on 1st October or seek TTPA and then in January submit ct600 for the p/e 31/12/2024. As for FA - that's the thing - You get what you pay for...


Thank you. I don't have issue in paying CT. So the correct way would be to claim refund for CT from 2023 in return for 2024. Did i understand it correct?
ketteringUK wrote:

Generally this forum is not a taxaid.org.uk and does not provide FOC advisory - Would you provide free service or product in your business to a random folk off the street or internet?


You are right. I wouldn't offer free service in my line of business however i would certainly give some free advice...
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Replying to romstav:
panda ketteringUK
By ketteringUK
16th Jun 2024 21:39

I would personally advise not to pay the charge and be aiming to prepare the accounts as early as possible in January once the debtors and creditors are established. Don't forget to put CT repayment to offset unpaid liability.

You have 12 months for CT600 submission so submit this shortly before the new year's eve and then in January when the letter comes in about unpaid tax, sent them a letter stating losses carried back and amount of tax repayable against the previous period.

Worked a magic in the past. Ct600 is the least chased tax by HMRC and there are no penalties for late payment. However, it can take 3 weeks or 10 months for CT losses to be carried back and amend the original liability.

That's a free advice :) intentionally left off some detail here. For this you need to pay:):)

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Replying to ketteringUK:
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By romstav
17th Jun 2024 18:47

thank you :)

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By David Ex
16th Jun 2024 20:38

romstav wrote:

… I am using freeagent to for accountancy and filing of accounts and everything was good ….

Software isn’t a substitute for an accountant so whether or not your accounts and tax returns have been correctly prepared it’s impossible to say.

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Replying to David Ex:
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By romstav
17th Jun 2024 18:48

thank you for the advice...

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By Matrix
16th Jun 2024 21:07

File the 2023 return and the functionality may be introduced by the time you file 2024. I am a big fan of FreeAgent but I find it hard to believe that the accounts/tax is right without an accountant having to make journals, especially for a construction company.

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Replying to Matrix:
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By romstav
16th Jun 2024 21:15

Thank you.
That was my plan. I even emailed and asked Freeagent support if they have any plans to add this option...however they don't know if/when it will be introduced. May be a few people should email them and ask for this.

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Replying to romstav:
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By Paul Crowley
16th Jun 2024 21:33

Most accountants use specific tax agent software.

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DougScott
By Dougscott
17th Jun 2024 09:59

You can of course extend the accounting period by up to six months if it makes sense to do so. There are many different scenarios and if you actually appointed a decent accountant they should be able to keep you legal, save you time and also actually save you money. if you are not a trained accountant yourself it is usually a false economy to try and muddle through yourself.

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Replying to Dougscott:
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By romstav
17th Jun 2024 18:50

i would of appointed accountant if i had some complex accountancy...
Thank you for the advice

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Replying to romstav:
RLI
By lionofludesch
17th Jun 2024 20:50

romstav wrote:

i would of appointed accountant if i had some complex accountancy...
Thank you for the advice

Yet here you are asking accountants for advice on a complex problem.

You don't value accountants enough.

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Replying to lionofludesch:
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By romstav
17th Jun 2024 22:00

Ok, thank you understood your position here. Surely you look for advice on the net and then trying to fix something at home etc... Does it mean you don't value builders, mechanics etc...
Everyone has their own reasons to do something themselves

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Replying to romstav:
RLI
By lionofludesch
17th Jun 2024 23:11

I absolutely get a man in. They do the job better than me.

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Replying to romstav:
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By David Ex
18th Jun 2024 13:37

romstav wrote:

i would of appointed accountant if i had some complex accountancy...

The words Dunning and Kruger spring to mind.

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Replying to David Ex:
RLI
By lionofludesch
18th Jun 2024 13:49

David Ex wrote:

The words Dunning and Kruger spring to mind.

Also "have".

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Replying to lionofludesch:
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By David Ex
18th Jun 2024 14:00

lionofludesch wrote:

Also "have".

Don’t get me started on that ….

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By Matrix
18th Jun 2024 07:25

FreeAgent should have far more disclaimers. To be fair to the OP, they say that you don’t need an accountant if your accounts are straightforward. They don’t define this (and I have already expressed my view).

https://www.freeagent.com/#:~:text=No%20accountant%3F,if%20your%20books%....

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Replying to Matrix:
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By FactChecker
18th Jun 2024 12:48

As you say, they don't define straightforward .. but they're very good with the weasel words - the full claim from which you've taken an extract is:

"No accountant? No problem. You can use FreeAgent accounting software without an accountant, especially if your books are straightforward."
NOTE: 'you can use' makes no reference to accuracy or effectiveness of doing so!

They also state (higher up on that page):
"Voted the UK's #1 bookkeeping software for small businesses"
... but the only listed awards are either from bodies of which I've never heard and for very specific attributes (that don't constitute comprehensive 'bookkeeping software for SMEs') OR are many years out-of-date (from Aweb - oh the shame of it)!

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