What happens if my company made a loss?

By Unfiled_

My limited company spent more on its trade than it earned during the accounting period. How is a trading loss reported, and can it reduce Corporation Tax in another period?

Accepted answer

By Unfiled_

A trading loss does not simply disappear, but the available relief depends on the type of loss, the company's other income and whether the trade continues. The loss is calculated from the accounts and tax adjustments, then reported in the Company Tax Return. It may be usable against other profits of the same period, carried back where the relevant rules and time limits permit, or carried forward for use against eligible future profits. Capital and property losses follow different rules, and restrictions can apply. Keep the computation and supporting records rather than treating a negative bank balance as the tax loss. Claims should be made through, or alongside, the relevant return within the applicable deadline. See HMRC guidance on Corporation Tax losses.