Corporation tax
Trading losses can be set against current year profit, carried back twelve months, or carried forward against future profits.
Written and reviewed by Waqas Sagar Member of ICAEW, Fellow of ACCA, Fellow of AAT, a double graduate and entrepreneur at heart, helping startups grow and serving thousands of businesses nationwide with an excellent team. Published by LimitedCompany.Accountants, 12 London Road, Morden, London SM4 5BQ. Reviewed 12 September 2026 against 2026/27 UK rates and current Companies House and HMRC guidance.
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QuickBooks PartnerCertified ProAdvisor100+ yearsCombined team experienceFully insuredUp to £2m indemnityA trading loss can be set against other profits of the same period, carried back twelve months against the previous period's profits for a tax refund, or carried forward and set against future profits. Carry back and current year relief require a claim.
Choosing the route
Keeping the loss usable
A trading loss can be set against other profits of the same period, carried back twelve months against the previous period's profits for a tax refund, or carried forward and set against future profits. Carry back and current year relief require a claim.
Carry back produces cash now, which usually beats relief later, especially where the earlier year was taxed in the 26.5% marginal band. The claim is made in the CT600 or by letter, and the repayment usually arrives within weeks of processing.
Carry forward suits a company expecting higher profits soon. Post-April 2017 losses carried forward are flexible and can be set against total profits or surrendered as group relief, subject to the £5m deductions allowance and 50% restriction for larger groups.
Losses can be restricted or lost on a change of ownership combined with a major change in the nature or conduct of the trade, and a trade that ceases restricts carried forward relief. This matters when a company is bought, or when a founder pivots the business entirely.
Record the loss properly in every CT600 even in dormant years. Losses that were never reported are routinely disputed when finally claimed.
Rates, thresholds and deadlines quoted here reflect the 2026/27 UK position and current Companies House and HMRC guidance. Check GOV.UK, or ask us, before relying on them for your own company.
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Frequently asked
Yes, generally two years from the end of the loss-making accounting period to make the claim.
Current year and carry back claims are all or nothing against available profits, while carried forward losses can be claimed in part.
No. Capital losses are set against chargeable gains only and cannot relieve trading profit.
Keep bank statements, sales and platform reports, purchase invoices, payroll records, VAT workings, finance agreements and Companies House correspondence. We confirm the exact list at onboarding and identify gaps before a filing deadline becomes urgent.
The fee depends on transaction volume, record quality, VAT and payroll requirements, historic catch-up and the level of reporting needed. We agree a fixed scope and price before technical work starts, with published packages available on our fees page.
Yes. We request professional clearance, collect the prior records and authorities, check the next Companies House and HMRC deadlines, and give you one clear handover list. The process is normally completed remotely.
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We regularly work with Xero, QuickBooks, FreeAgent, Sage and connected sales or expense apps. The right setup depends on transaction volume, integrations and the reports you need, not simply the software brand.
The relevant calendar may include annual accounts, Corporation Tax payment and return dates, confirmation statements, VAT returns, payroll submissions and Self Assessment. We map the dates from your company year end and registrations.
No. This page explains general UK rules and common accounting treatment. Your facts, contracts and wider tax position must be reviewed before you rely on a conclusion.
Included approach
Check the current rules
Deadlines, thresholds and filing rules change. GOV.UK and Companies House publish the current statutory position; advice should then be applied to your company’s circumstances.
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