Company Trading LossesNew Changes On Company Trading Losses Carried ForwardThe government has announced that corporate losses arising on or after 1 April 2017 can be carried forward against total profits of the company or can be group relieved. So the previous restriction of corporate trading losses to be carried forward against the same trading profit has been removed now. Where your company operates more than one type of trade, or you run a small group of companies, the new rules will allow unused losses from one trade to be carried forward and set against profits from other trades in later years. This will give great advantage to companies and groups to utilize the brought forward losses either in the same company or in the same loss group.However there is a restriction on the pre April 2017 losses as they can only be carried forward against the same trading profit and can’t be relieved under the new rules. The post April 2017 losses can be carried forward under the new rules against the total profit of the company or can be group relieved. The accounting period needs to be split between pre and post April 2017 for losses. The rules would apply to trading losses, management expenses, non-trading loan relationship deficits, non-trade losses on intangible fixed assets and UK property business losses.Each standalone company or group will be entitled to a £5 million annual allowance of unrestricted loss relief so relief for brought-forward losses would have been restricted to a maximum of 50% of total profits over that amount.By Sarfraz KhanVantage Tax ConsultantSeptember 2017Contact us for more information. Tax fee protection schemes and how we can help you.
