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Step-by-step Guide

CT600 how to claim terminal loss relief

Article ID: 3185
Last updated: 20 Apr, 2023

What is Terminal Loss Relief

Where a company has stopped trading and it has made a loss in its final 12 months of its trade the relief is extended as the company can carry back any trading losses that occur in the final 12 months of a trade and set them off against profits made in any or all of the three years up to the period when the loss was made providing:

  • the company or organisation was carrying on the same trade at some point in the accounting period or periods that fall in the year in which the losses are being offset.
  • If the accounting period end date has changed, or any of the earlier accounting periods in that three year period are less than 12 months, the profits are apportioned.

  • the loss is offset against the profits of most recent years first, before it can be carried back to earlier years. 

How to claim terminal loss relief in the CT600

  1. Firstly, In the current period return , HMRC request that box 45 is ticked (claim or relief affecting an earlier period) In TaxCalc this can be found in HMRC Forms > page 1 or in SimpleStep > Finalising the return.
  2. The losses should be identified as being carried back in TaxCalc in:
    1. HMRC Forms mode :Go to CT600 Core > Computations > Losses, Management Expenses, NTLRDs and NTLIFA’s >Trading Losses > Insert the loss in the box for ‘‘Carried back against profits of a previous period’’
    2. SimpleStep mode: Go to CT600 Core > Losses, Management expenses, NTLRDs, NTLIFAs > Trading losses.  Insert the loss in the box for ‘‘Carried back against profits of a previous period’’. 
  3. HMRC also require the date of cessation to be included within the submission but this piece of information is not something that forms part of the automatic filing process. We therefore recommend attaching a letter to the return which includes the date the company ceased trading. It will need to be in pdf format so that it can be attached within : Check and Finish > Manage attachments > 'Other' section > add other pdf

Our article: CT600 losses and how to carry them back to previous periods, provides more information on amending previous years returns and the temporary extended loss relief.

Article ID: 3185
Last updated: 20 Apr, 2023
Revision: 6
Views: 2258
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Also listed in
folder Tax Return Production -> CT600 Corporation Tax Return