HMRC has published regulations supplementary to Finance Act 2021 Sch 2 that introduces the temporary extension to the trading loss carry-back rules from 12 months to three years for companies and unincorporated businesses.
The Corporation Tax (Carry Back of Losses: Temporary Extension) Regulations, SI 2021/704, apply only to companies that are in a group and set out the requirements for the submission of loss carry-back allocation statements. The statements are required for group companies wishing to make claims exceeding a de minimis limit of £200,000 and must set out how the cap of £2m of losses per 12-month period is allocated across the group. Separate loss carry-back allocation statements are required for the 2020 and 2021 financial years and must be made by a nominated company.
The regulations also make provision for the amendment of company tax returns (relaxing the usual time limits for amendments) in consequence of a loss carry-back allocation statement, and for the recovery of overpaid relief.
HMRC has also updated its guidance Work out and claim relief from corporation tax trading losses, with a new section setting out how companies can make claims either in their tax returns or outside of tax returns for de minimis claims of £200,000 or under. The guidance notes that HMRC will give an update ‘shortly’ on the preferred method for claim submissions outside of returns and acknowledges that carry-back claims can now be made, following royal assent to FA 2021 on 10 June 2021.
HMRC has published regulations supplementary to Finance Act 2021 Sch 2 that introduces the temporary extension to the trading loss carry-back rules from 12 months to three years for companies and unincorporated businesses.
The Corporation Tax (Carry Back of Losses: Temporary Extension) Regulations, SI 2021/704, apply only to companies that are in a group and set out the requirements for the submission of loss carry-back allocation statements. The statements are required for group companies wishing to make claims exceeding a de minimis limit of £200,000 and must set out how the cap of £2m of losses per 12-month period is allocated across the group. Separate loss carry-back allocation statements are required for the 2020 and 2021 financial years and must be made by a nominated company.
The regulations also make provision for the amendment of company tax returns (relaxing the usual time limits for amendments) in consequence of a loss carry-back allocation statement, and for the recovery of overpaid relief.
HMRC has also updated its guidance Work out and claim relief from corporation tax trading losses, with a new section setting out how companies can make claims either in their tax returns or outside of tax returns for de minimis claims of £200,000 or under. The guidance notes that HMRC will give an update ‘shortly’ on the preferred method for claim submissions outside of returns and acknowledges that carry-back claims can now be made, following royal assent to FA 2021 on 10 June 2021.
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