Romford Essex Accountants Blog: Temporary Extension Of Trading Loss Carry-Back
During the two fiscal years 2008/09 and 2009/10, limited companies and sole traders/partnerships that made a trading loss during these period could temporarily extend the carry back of these losses from one year to three years. The losses would be carried back against the later years first.
Which Losses Could The Extension Be Applied To
For limited companies, the extension in the loss carry-back period applying from 22 April 2009 to losses in accounting periods ending between 24 November 2008 and 23 November 2010.
For sole traders/partnerships, the extension in the loss carry-back applied to losses made in the fiscal years 2008/09 and 2009/10.
How Are The Trading Losses To Be Relieved
After losses have been carried back, under the normal rules, a maximum of £50,000 will be available to carry back to the earlier two years. A separate limit applies to each twelve month period or tax year within the duration of the extension.
For companies, there will be a separate cap of £50,000 on the carry back of losses in accounting periods ending in the 12 months to 23 November 2009 and on the losses ending in the accounting period ending in the 12 months to 23 November 2010.
For sole traders/partnerships, a separate £50,000 cap applies to the extended carry back in each of the tax years 2008/09 and 2009/10.
What You Can Do Now - Limited Companies
If you forgot to make the claim to the temporary extension of the carry-back then there are some things you can do:-
- companies or their advisers can amend a Corporation Tax Return at any time up to 12 months after the filing deadline (which is normally 12 months after the end of the accounting period). So a company which has filed a Corporation Tax Return for an accounting period ended 31st October 2010 will have until 31st October 2012 to amend it;
- If the normal time limit for amending the Corporation Tax Return has passed, you should contact the district dealing with the companies case, in writing, to make the claim. HMRC will then review your claim within the revised carry back rules.
What You Can Do Now - Sole Traders/Partnerships
If you forgot to make the claim to the temporary extension of the carry-back then there are some things you can do:-
- taxpayers or their advisers can amend a Self-Assessment Tax Return at any time up to 12 months from 31st January after the end of the tax year to amend the return. Therefore, the 2009/10 Tax Return can be amended before 31st January 2012;
- If the normal time limit for amending the Self-Assessment Tax Return has passed, you should contact the district dealing with the taxpayerscase, in writing, to make the claim. HMRC will then review your claim within the revised carry back rules.
If you have any questions concerning this blog then please contact us here at Trueman Brown Chartered Accountants.
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