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Relief for corporation tax losses

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Caroline Lucas MP, the leader of the Green Party, asked the government how much of the corporation tax losses declared in respect of accounting periods ending in 2007/08, 2008/09 and 2009/10 was carried back for offset against profits of previous periods; how much corporation tax was repaid as a result of such carry-backs of losses in each such year; and what the monetary value was of the tax losses carried forward for offset against future profits at the end of each such year.

David Gauke, the Exchequer Secretary to the Treasury, replied on 24 January: ‘Loss relief policy remains unchanged since the inception of the corporation tax regime in 1965. From HMRC databases it is estimated that in 2007/08 just over £5.1 billion of allowable losses were carried back by UK companies. In 2008/09 the figure increased to just under £7.8 billion. These figures represent the gross value and not the tax impact of allowing carry-back of these losses. Complete data for 2009/10 are not yet available.’

He added that ‘the data provided by corporation tax returns it is (sic) very difficult to separately identify the total value of repayments made purely from carry back of losses; or the final value of losses made in-year that are carried forward across corporate groups’. As such, he said, those figures cannot be provided.