Reclaiming Tax After A Loss

[Nighthawk Software]

We've been relatively profitable over the last few years, and paid a fair amount in tax. Last year however, we reported our first loss since starting. Our accountant has shown that we owe a negative amount in tax, as a result of this loss. I asked if that meant we were owed money back from the tax man, to which the accountant said yes we were. I did ask a few times how to claim this refund, but he just said we'd be notified through mail about claiming this.

It's been about 4 months now since we did the accounts, and havent heard anything back yet regarding how to reclaim this tax back.

Is the accountant correct, are we owed a refund in tax due to the recent loss? If so, how do we reclaim this.. do we just have to wait until HMRC contact us and tell us what to do?

 

[Newchodge]

Are you a sole trader or a limited company?

 

[DontAsk]

If ltd you carry the loss forward and offset it against the next year profits, if there are any. There's a limit to how many years you can carry.

 

[UK Contractor Accountant]

The loss is carried back and used to generate a tax refund.

The Acciuntant should have submitted liss carry back claim when filing the current years corporation tax return.

There is a section on the CT Return to notify HMRC whatbank account you want the ct refund to be sent to.

You might look to change Accountants if communication/support seems a bit lacking.

 

[Daybooks]

If you make a trading loss in an accounting period then the company may make a claim for carry back relief to deduct the loss from its total profits of its earlier accounting periods that fall wholly or partly within the 12-month period ending immediately before the period in which the loss is made.

The current period trading loss must be used against any other “total profits” in that year before carry back relief. In doing so the carry back loss may result in an overpayment of previous year’s tax for which you’d be entitled to a refund.

The guidance for completing the returns (whether current or prior) is given here:

https://www.gov.uk/guidance/corporation-tax-calculating-and-claiming-a-loss

You may find you still need to nudge HMRC for the repayment.

 

[AndreasC]

Chase your accountant up on this. I'm sure they have done it right and HMRC need a nudge to process the return and make the repayment

 

[MyAccountantOnline]

We've been relatively profitable over the last few years, and paid a fair amount in tax. Last year however, we reported our first loss since starting. Our accountant has shown that we owe a negative amount in tax, as a result of this loss. I asked if that meant we were owed money back from the tax man, to which the accountant said yes we were. I did ask a few times how to claim this refund, but he just said we'd be notified through mail about claiming this.

It's been about 4 months now since we did the accounts, and havent heard anything back yet regarding how to reclaim this tax back.

Is the accountant correct, are we owed a refund in tax due to the recent loss? If so, how do we reclaim this.. do we just have to wait until HMRC contact us and tell us what to do?

I would hope your accountant has made a claim for the loss relief and is chasing this for you, but do check.

In your accountants defence I am seeing horrendous delays in getting some clients tax refunds for loss carry backs at present. Some are taking months to issue and trying to get them sent is hard work.

 

[DontAsk]

I am seeing horrendous delays in getting some clients tax refunds for loss carry backs at present.

If you don't need the cash, it might be quicker to carry forward to the next year

https://www.gov.uk/guidance/carry-forward-corporation-tax-losses or am I misunderstanding something?

 

[macScot]

As above, if you do not need the cash immediately, then carry it forward into next year, as rates increase from 19% to 25%, it will only help if you make profits above £50,000, so if you forecast profits of less than 50k you should carry the loss back instead of forward.