Is your company expecting to make a loss as a result of the global pandemic?


If so, you may be interested to learn that HMRC has recently updated its guidance relating to repayment of corporation tax based on anticipated losses.


Tax repayments are possible where surplus losses made in an accounting period are carried back to the previous period and set against any profits in that period. Normally HMRC does not accept carry-back claims until the tax return for the loss-making period has been submitted, which means that there is usually quite a wait for the repayment.


HMRC has now acknowledged that, in exceptional circumstances such as the Covid-19 pandemic, repayment claims can be made before the current corporation tax return period (in which the loss will arise) has ended. Full supporting evidence will be required from the company to confirm the exceptional circumstances and support the quantum of the anticipated losses; this could include management accounts, board of director’s reports and any public statements.


If you think that your company is likely to make a corporation tax loss in the current accounting period that can be carried back, please get in touch with us for further advice.