Trading Losses & Corporation Tax: How to Claim Relief on Your CT600
If your limited company makes a trading loss, you don't just absorb it — HMRC offers several ways to use that loss to reduce your Corporation Tax bill. Getting this right can save your company thousands.
Types of Loss Relief
1. Set Against Current Period Profits (s37 CTA 2010)
Your trading loss can be set against all profits of the same accounting period — not just trading profits. This includes investment income, chargeable gains, and property income.
This is usually the first option to consider because it gives immediate relief.
2. Carry Back (s37(3)(b) CTA 2010)
After setting the loss against current period profits, any remaining loss can be carried back to the previous 12 months and set against total profits of that period.
If you've already paid Corporation Tax for the carry-back period, HMRC will refund the overpayment.
Example: Carry Back
| Period | Profit/Loss | Tax Position |
|---|---|---|
| Year ending 31 March 2025 | £50,000 profit | CT paid: £9,500 |
| Year ending 31 March 2026 | (£80,000) loss | No CT due |
The £80,000 loss is carried back against the £50,000 profit. HMRC refunds the £9,500 CT already paid. The remaining £30,000 loss carries forward.
3. Carry Forward (s45 CTA 2010)
Losses not used in the current period or carried back can be carried forward indefinitely. From 1 April 2017, the first £5 million of carried-forward losses can be used each year without restriction. Above £5M, losses are restricted to 50% of profits.
CT600 Boxes for Losses
| Box | Description |
|---|---|
| Box 160 | Trading losses carried forward |
| Box 165 | Trading losses claimed against total profits |
| Box 170 | Trading losses carried back |
| Box 175 | Trading losses carried forward (after claims) |
4. Terminal Loss Relief (s39 CTA 2010)
If your company ceases trading, losses from the final 12 months can be carried back up to 3 years (not just 12 months).
5. Group Relief (s99 CTA 2010)
If your company is part of a 75% group, trading losses can be surrendered to other group companies to offset their profits.
Common Mistakes
- Not claiming loss relief at all — HMRC won't apply it automatically
- Claiming carry-back without current-year relief — you must use s37 first
- Mixing capital and trading losses — capital losses can only offset capital gains
- Missing the time limit — claims must be made within 2 years of the loss-making period end
- Forgetting to file — you must file a CT600 even if you make a loss
Made a trading loss? File your CT600 with Taxpipe and claim the relief you're entitled to. £59, no hidden fees.