Basically if your company makes a loss you carry it forward.

The amount of trading loss available to be carried forward is the loss sustained less any loss relieved in the current year or surrendered as group relief.

Carry forward a corporation tax loss is automatic, therefore as no claim is required there is no time limit.

The legislative reference for a trading loss carried forward is: CTA 2010 s45) [old reference ICTA 1988 s393(1)].

You can also make a claim to carry a loss back 12 months.

The legislative reference for carry back loss relief is: CTA 2010 s37(s)(b)(6)(8) and s38 [old reference ICTA 1988 s393A(1)(b)(2)-(2C)].

But there is another option, to help improve your cash flow, lets say you have been making profits and you have just come to the end of your accounting period, the next few months are going to be tough and you will make a loss. If you change your year end by extending it or having a shorter period you could help your cash flow.

Corporation Tax is payable 9 months and 1 day after your year end, so you will have a return for 12 months and have tax to pay but if you had a 6 month return to follow it you could reduce the time before you claim relief for the loss.

If you extended your accounting period to 18 months the figures might even look better for credit rating.

You can shorten as much as you want but not beyond the start date of the accounting period being changed.

You can only extend once every 5 years.

See the Companies House Checklist for details

steve@bicknells.net