How long can you carry a loss forward?

[Lance]

I did know that, yes! But thanks anyway.

Good. Just checking.

In that case then, as you have made a profit in previous years, why not simply offset current losses against previous profits and get some CT back from the HMRC for this year? Makes far more sense that deferring it for a few years in the future.


EDIT: saw the reason why in an earlier post.

But you do need to consider whether your business is going to profitable ever. Given the current economic situation. Perhaps an open and honest conversation with a professional is the best bit of advice you can get here?

[ladymuck]

But you've had a look though haven't you... come on.. admit it...

A lady never tells

[northernladuk]

No-one is stalking you. Looking for clarification

I won't go and check NLUK's comments against your posts as you'll think I'm a stalker too.

But you've had a look though haven't you... come on.. admit it...

[ittony]

You do know that profit/loss is calculated before dividend distribution don’t you?

I did know that, yes! But thanks anyway.

[ittony]

Until you make a profit that exceeds the balance of your losses or you reach £5m

Year 1 Loss of £1,000
Year 2 Profit of £50 - Retained loss = £950
Year 3 Profit of £300 - Retained loss = £650

and so on

Thanks ladymuck, that's very good to know. In fact it will be quite nice to think that everything I earn for a while now will be effectively tax free.

Ah. The one who wanted a CT refund

https://www.contractoruk.com/forums/...ax-refund.html

"The one"!? Charming. Yes, the loss is largely on account of that written off bad debt.

The other issues my stalker keeps digging out are in connection with a different company, with which the prospective deal didn't come off in the end.

[ladymuck]

northernladuk, if you're going to keep stalking me, could you at least up your reading comprehension skills please.

No-one is stalking you. Looking for clarification

I won't go and check NLUK's comments against your posts as you'll think I'm a stalker too.

[ittony]

Under 5 million loss? since 2017?

So if you've been carrying a loss since 2017 how come your brother was involved and why have you been re-arranging shareholdings? In Nov 2019 you stated the company was making a profit. How did the working for equity pan out?.

northernladuk, if you're going to keep stalking me, could you at least up your reading comprehension skills please.

[Lance]

You do know that profit/loss is calculated before dividend distribution don’t you?

[northernladuk]

Ah. The one who wanted a CT refund

https://www.contractoruk.com/forums/...ax-refund.html

And to buy his brother out, re-arrange shareholdings and work for equity.....

[ladymuck]

Are we to assume you still don't have an accountant?

Ah. The one who wanted a CT refund

https://www.contractoruk.com/forums/...ax-refund.html

[northernladuk]

Are we to assume you still don't have an accountant?

Under 5 million loss? since 2017?

So if you've been carrying a loss since 2017 how come your brother was involved and why have you been re-arranging shareholdings? In Nov 2019 you stated the company was making a profit. How did the working for equity pan out?

Something is starting to smell very fishy here.

[ladymuck]

Unfortunately I didn't make enough profit last year to offset it.

I did come across that HMRC extract but it didn't seem to say anything about the number of years it could be carried forward. The loss is all after 2017, and whilst large, is comfortably under £5 million I'm pleased to report. So that quote seems to be saying I can offset all of it, but for how long?

Until you make a profit that exceeds the balance of your losses or you reach £5m

Year 1 Loss of £1,000
Year 2 Profit of £50 - Retained loss = £950
Year 3 Profit of £300 - Retained loss = £650

and so on

[ittony]

With regards to the loss this year have you considered carrying the loss back against last years profits?
For losses going forward, the extract from HMRC will be useful;

Unfortunately I didn't make enough profit last year to offset it.

I did come across that HMRC extract but it didn't seem to say anything about the number of years it could be carried forward. The loss is all after 2017, and whilst large, is comfortably under £5 million I'm pleased to report. So that quote seems to be saying I can offset all of it, but for how long?

[Ricky@IntouchAccounting]

Looks like I'm going to be making a big loss this year (sad face), and I'm beginning to doubt the prospects for making much profit next year either. Is there any limit on the number of years I can carry the loss forward?

With regards to the loss this year have you considered carrying the loss back against last years profits?
For losses going forward, the extract from HMRC will be useful;

Profits that arise from 1 April 2017
There are restrictions on the total amount of carried forward losses that can be offset against profits of accounting periods from 1 April 2017.

These apply to carried-forward trading losses so that the total:

amount that can be relieved using carried-forward trading losses that arose before 1 April 2017 is restricted to, broadly, the amount of an allowance up to £5 million, plus 50% of remaining trading profits after deduction of the allowance
overall amount that can be relieved using most types of carried-forward losses - including carried-forward trading losses incurred either before or after 1 April 2017 - is restricted to, broadly, the amount of an allowance up to £5 million, plus 50% of remaining total profits after deduction of the allowance

[ittony]

Looks like I'm going to be making a big loss this year (sad face), and I'm beginning to doubt the prospects for making much profit next year either. Is there any limit on the number of years I can carry the loss forward?