Corporation Tax Loss Relief: How to Claim on Your CT600

Corporation Tax Loss Relief: How to Claim on Your CT600

If your company made a loss, you don't just lose that money for tax purposes — you can use it to reduce your tax bill in other periods. This is called loss relief, and it's one of the most valuable tools available to UK limited companies.

This guide explains every type of loss relief available, how to claim each one on your CT600, and common mistakes to avoid.

Types of Corporation Tax Loss Relief

There are several ways to use trading losses:

Current Year Loss Relief

If your company makes a trading loss, it's automatically set against your total profits for the same accounting period. You don't need to make a special claim — this happens on the CT600 itself.

Example: Your company has:

• Trading loss: £30,000
• Rental income: £10,000
• Bank interest: £2,000

The trading loss is first set against total profits (£12,000), reducing your taxable profit to £0. The remaining £18,000 loss can be carried back or forward.

CT600 Boxes for Loss Set-Off

• Box 275: Total trading losses of this period claimed against total profits (enter as a positive number). This covers the current-year set-off under s.37 CTA 2010 — the loss can reduce trading profits, rental income, interest income, and capital gains alike.
• Box 160: Losses brought forward from earlier periods set against trading profits only. Enter the amount of old losses used to cover this year's trading profit; cannot exceed box 155.
• Box 285: Carried-forward trading losses (arising after 1 April 2017) set against total profits — more flexible than box 160 because the relief can cover non-trading income too.

Note: Box 235 is your "profits before other deductions and reliefs" — it is an automatically calculated subtotal and is always a positive (or zero) figure. It is never where you enter a trading loss.

Carry Back Loss Relief

You can carry back trading losses to set against profits of the previous 12 months. This is useful because you can get a tax refund for tax already paid.

How to Claim

There is no supplementary form for trading loss carry-back. The claim is made directly on the CT600 for the earlier (profitable) period:

1. File the loss-making period's CT600 — tick box 45 (claim or relief affecting an earlier period)
2. File or amend the earlier period's CT600 — enter the carry-back amount in box 275 and tick box 280 (to indicate that the figure in box 275 includes losses carried back from a later period)
3. HMRC processes the repayment against the earlier period's tax

Important: you cannot make the carry-back claim until the return for the loss-making period has been delivered.

Key Rules

• The carry-back period is the 12 months immediately before the loss-making period
• If accounting periods don't align, the loss is apportioned
• You must claim within 2 years of the end of the loss-making period
• The claim is against total profits (not just trading profits)

Example: Your company's year ends 31 March 2026 with a £50,000 trading loss. You can carry this back to the year ended 31 March 2025, getting a refund of up to £50,000 × 25% = £12,500 (at the main rate).

Carry Forward Loss Relief

If you can't use all your losses in the current year or by carrying back, the remainder carries forward indefinitely to set against future profits.

Post-April 2017 Restriction

For accounting periods beginning on or after 1 April 2017, carried-forward losses can only offset:

• The first £5 million of profits in full
• 50% of profits above £5 million

This restriction rarely affects small companies but is important to know about.

CT600 Boxes

• Box 160: Losses brought forward set against trading profits from the same trade
• Box 285: Post-April 2017 losses brought forward set against total profits — use this when you want to apply old trading losses against rental income, interest, or gains, not just trading profits

Group Relief

If your company is part of a group (75% ownership), losses can be surrendered between group companies in the same accounting period.

How It Works

1. The loss-making company (surrendering company) gives up some or all of its losses
2. The profitable company (claimant company) reduces its taxable profits
3. Both companies must complete the CT600C (Group and Consortium Relief) supplementary page; the relief amount flows to box 310 on the main CT600
4. Claims must be made within 2 years of the end of the claimant's accounting period

Requirements

• Both companies must be in the same 75% group (directly or indirectly)
• The accounting periods must overlap
• Only the overlapping portion of losses can be surrendered
• Both companies must be UK resident (or have a UK permanent establishment)

Terminal Loss Relief

When a company ceases trading, losses in the final 12 months can be carried back 3 years (instead of the usual 12 months).

This is particularly useful for companies being wound down, as it can generate significant tax refunds.

How to Claim

• Tick box 45 on the final period's CT600 and amend the earlier years' returns (box 275 + box 280 in each amended return)
• The loss is set against profits on a LIFO (last in, first out) basis — most recent year first

Non-Trading Losses

Not all losses are trading losses. Other types include:

Non-Trading Loan Relationship Deficits

If your company has more interest expenses than interest income (outside of a trade), this creates a non-trading loan relationship deficit. This can be:

• Set against total profits of the same period (box 260)
• Carried back 12 months
• Carried forward against non-trading profits (box 230)
• Group relieved

Capital Losses

Capital losses can only be set against capital gains — they cannot reduce trading profits. Unused capital losses carry forward indefinitely.

Property Business Losses

UK property business losses are set against total profits in the same period (box 250). Any excess carries forward against future total profits.

Common Mistakes to Avoid

1. Using the Wrong Loss Boxes

Trading losses set against total profits this period go in box 275 — not box 235, which is an automatically calculated subtotal. Losses brought forward against trading profits go in box 160; post-2017 losses brought forward against total profits go in box 285. Getting these boxes wrong means your loss claim won't be processed correctly.

2. Missing the 2-Year Deadline

Carry-back claims must be made within 2 years of the end of the loss-making accounting period. Miss this and you lose the refund.

3. Not Filing the Loss Year Return First

HMRC will not process a carry-back refund until the loss-making period's return has been filed. File that return first (ticking box 45), then amend the earlier period.

4. Confusing Trading and Capital Losses

Trading losses are flexible — they can be set against any type of profit. Capital losses can only offset capital gains. Don't try to claim capital losses against trading profits.

5. Incorrect Loss Carry-Forward Amounts

Always check that your carried-forward losses match what HMRC has on record. If there's a discrepancy, it can trigger an enquiry.

How to File with Taxpipe

Taxpipe supports current-year set-off and carry-forward of trading losses automatically:

1. Enter your figures in the guided wizard — income, expenses, and any losses brought forward
2. Taxpipe calculates the correct relief and populates boxes 160, 275, and 285 as appropriate
3. Submit to HMRC — your loss relief is included in the submission

For carry-back claims, group relief, or terminal loss relief — which require amending earlier returns or filing CT600C — you will need an accountant or specialist Corporation Tax software.

Summary

Loss relief is one of the most powerful tools in corporation tax. If your company has made a loss, make sure you're using it effectively — it could mean a significant tax refund or a lower tax bill in future years.

Need to file a CT600? Taxpipe handles it for £59 — including current-year loss set-off and carry-forward, with a guided wizard so you don't need to know box numbers.

Related Reading

• Company Losses: Trading vs Non-Trading on CT600
• Dividends vs Salary: The Tax-Efficient Way to Pay Yourself
• Dividend vs Salary: The Most Tax-Efficient Split for 2025/26