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Temporary extended loss carry back rules

05 April 2022 / Sheridan Matthew Gray
Issue: 4835 / Categories: Comment & Analysis
77394
Special losses

Following the pandemic and the struggles this has caused for many companies the government has introduced a ‘special’ temporary extension to the trading loss carry back rules for companies. These are examinable in both Association of Taxation Technicians papers 2 and 4.

To be clear these rules apply only to trading losses – not to other losses such as property losses capital losses and deficits on non-trading loan relationships that a company may have.

Before we take a look at the detail of these special temporary rules let’s remind ourselves of the normal loss relief rules for trading losses incurred by a company.

Current period

In the current period the company can claim losses against its total profits ie before qualifying charitable donations are deducted. This type of loss relief is an ‘all or nothing’ loss relief claim – I can remember this because...

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