How to carry back trading losses for a Limited company in Business
Tax
Introduction
This topic explains the necessary steps for carrying back losses for
a limited company. This process involves a number of entries which are
detailed below.
Loss making period
Enter losses to carry back.
Indicate on the CT600 that Repayment
is due for an earlier period.
Previous years where the loss would be carried back to if an amended
return is being sent
Indicate on the CT600 that Repayment
is due for this return period.
Enter losses brought back for each
of the years with the amount relevant to each year/s.
Enter amount of ‘tax already been
paid but (not already repaid)’ in box 91for each of the years with
the amount relevant to each year/s.
Send an amended return for each of
the years where loss has been carried back to.
Loss arising period
- Select the period ( for example, posting file) when the losses
arose. To select the period click the magnifying glass next to the
company identifier.
In the example below; 31/03/2010 is the loss
arising period and losses would be carried back to period ending 31/03/2009.
- Highlight the period and click OK.
- Once the loss making period has been selected, select the A repayment is due for an earlier period
option on page one of the CT600 under the section About
this Return.
This box can be ticked by going to Data Entry | Summary
and as indicated on the screen below, selecting the For
earlier period option.
- Once the above option has been selected go to Edit
| Losses
Users are required to make an entry in the box Loss Carried
back in the loss making period. In our example, £50000
was entered in Less Loss Carried
Back.
- Enter how much of the losses you would like to be brought back
for each of the relevant CTAP column. In the example we have brought
back £25000 into period ending
31/03/2009 and the remainder £25000
into period ending 31/03/2008, reducing each of the periods profits
to nil. This entry will appear on the corporation tax computation
and in box 30 of the CT600.
Box 31 will also be selected
automatically.
- Enter Tax already paid
(but not already repaid) in row marked ‘c’. In the example two entries
have been made each equal to the amount Tax outstanding before the
losses were brought back. Notice once the entries have been made IRIS
automatically updates ‘Tax Overpaid’ row. The entries will be appearing
on the corporation tax computations as well as the relevant sections
of the CT600 accordingly.
- Last step of the process is to select the Repayment
is due for this return period option which will be selected
automatically by IRIS Business Tax for the relevant periods provided
there is an entry on 141 and/or 142 of the CT600.
- Send an amended return for all the earlier periods with losses
brought back. If you do not wish to send in an amended return for
the previous year’s then you can go to edit/notes and put a note in
to advise the HMRC that the losses have been carried back to 2009
and 2008 and that you are attaching the previous year’s computations
and CT600’s to show the repayments due.
You can then produce a pdf computation for the previous years and a
pdf ct600 for the previous years and attach them to the electronic
tax return of this year.
