Corporation tax loss carry back

Corporation tax loss carry back

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HMRC have rejected a claim for terminal loss relief for a company on the basis that the company had zero turnover in its final 12 month accounting period and therefore can't be considered to be trading. Is this right? The company had turnover in the previous period and was actively marketing its services and seeking clients in the final period, it just failed to attract any. Does that count as not carrying on a trade?

Many thanks.

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By tonycourt
18th Apr 2018 00:15

Keep the doors open for business and incurring costs that would usually be associated with the trade may well mean that trade continued.

I think you know how to proceed - you need to persuade HMRC that the company was trading despite the lack of turnover. If you achieve that then it will accept the loss claim.

HMRC's guidance might give you some help:

https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim80565

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By I'msorryIhaven'taclue
18th Apr 2018 00:24

If the Revenue insist the company ceased trading in what you are classing as its penultimate year, might there be a consolation claim for terminal loss relief for that (penultimate) year?

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