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

• Box 235: Your trading loss (negative figure)
• Box 275: Total profits before deductions
• Box 285: Losses set against total profits

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

1. Complete CT600A (Losses, Deficits and Excess Amounts)
2. Enter the carry-back amount in Box A70
3. Submit the CT600 for the loss-making period
4. HMRC will process the refund

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 A1: Trading losses brought forward
• Box 280: Losses brought forward set against 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 file CT600B (Group Relief)
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

• Complete CT600A with the terminal loss carry-back amounts
• 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
• Carried back 12 months
• Carried forward against non-trading profits
• 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. Any excess carries forward against future total profits.

Common Mistakes to Avoid

1. Forgetting to File CT600A

You must file the CT600A supplementary page to claim loss relief. Without it, HMRC won't process carry-back refunds.

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 Claiming Current Year Relief

Current year loss relief is automatic on the CT600, but you need to correctly complete boxes 235, 275, and 285. If these are wrong, your loss won't be properly recorded.

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 Claim Loss Relief with Taxpipe

Taxpipe handles loss relief automatically:

1. Enter your figures in the guided wizard — income, expenses, and any brought-forward losses
2. Taxpipe calculates the optimal loss relief claim
3. CT600A is generated automatically if needed
4. Submit to HMRC — your loss relief claim is included in the submission

You don't need to manually calculate loss apportionment or fill in CT600A boxes — Taxpipe does it for you.

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 with loss relief? Taxpipe handles it for £59 — including CT600A supplementary pages and automatic loss calculations.

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