The chancellor has announced a further measure to help businesses through the pandemic by increasing the number of years you can carry back tax losses.

Currently, trading losses in the current year can be carried back one year but this has temporarily been extended to three years for accounting results for period ends between 1^st April 2020 and 31^st March 2022.

Claims are normally made via the annual tax return but for under claims under £200,000, you can apply any time. There is a cap of £2,000,000 for each claim.

The normal rules will continue by applying losses to the current year first before any remaining are carried back one year and then to the second year and finally the third year.

This gives a significant opportunity to not only utilize these tax losses much more quickly, but also to turn them into a cash refund assuming you are up to date and had already settled your taxes for these earlier years.

In addition, similar relief is to be given to unincorporated businesses by allowing unrelieved losses to be carried back and set against profits of the same trade for three years before the tax year of the loss.

Click here for the UK government web page for details

https://www.gov.uk/government/publications/extended-loss-carry-back-for-businesses/extended-loss-carry-back-for-businesses

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