Companies can take advantage of an extended carry back period for trading losses arising in accounting periods that end between 1 April 2020 and 31 March 2022.
The trading losses from these periods can be carried back to set against total profits of accounting periods ending in the previous three years.
There are two £2 million caps (one for each financial year in which the loss is generated) for the losses carried back to the two earliest years of the three.
Claims for losses can be submitted as soon as the accounting period has ended, as long as the loss can be quantified appropriately and supported with draft accounts or management accounts.
Your company does not have to finalise its accounts for the year or submit its corporation tax return before making a claim.
HMRC will accept loss claims for up to £200,000 for this extended carry back period outside of the corporation tax return. Larger loss claims must be made on the corporation tax return.
Remember any covid business support grants the company has received form part of its trading income for the accounting period, so will reduce any trading loss.
Can your company claim extra loss relief to generate repayments of tax?