Industry News - 9th September 2026
Making a loss can be challenging when running a business. Whether you’ve experienced rising costs, a quieter trading period or invested in growth, your immediate focus will often be on getting things back on track.
However, a trading loss could also provide an opportunity to reduce your company’s Corporation Tax bill or recover tax already paid.
🔍 How does trading loss relief work?
There are three main ways your company can use a trading loss, depending on your situation:
1️⃣Against profits in the same accounting period
Your company may be able to offset a trading loss against other profits in the same accounting period, reducing its Corporation Tax bill.
2️⃣Carried back against earlier profits
If you still have losses after using them against current profits, you can carry them back to reduce profits from the previous 12 months. Your company must have been running the same trade during that earlier period. If you have already paid Corporation Tax on those profits, this could result in a repayment and provide welcome support for cash flow.
3️⃣Carried forward against future profits
Your company can generally carry unused trading losses forward as long as it continues the trade. It can normally offset losses arising on or after 1 April 2017 against its total profits in future accounting periods. For older trading losses, it can generally only claim relief against future profits from the same trade.
🧮 Is the loss in your accounts the amount you can claim?
Not necessarily. A trading loss for tax purposes is calculated after making adjustments to your accounting figures, including capital allowances and other tax adjustments.
📅 Don’t overlook the claim deadline.
Your company should normally claim to carry back a trading loss within two years of the end of the accounting period in which it made the loss.
💡 Perrigo Perspective
When your business makes a loss, it’s understandable that tax planning may slip down the priority list. But reviewing your options could significantly improve your cash flow.
The best approach depends on your previous results, expected future profits and what your business needs now. Taking time to consider these together can help you use the available relief more effectively.
📞 Need Help Making the Most of Your Company’s Losses?
At Perrigo Consultants, we can review your company’s tax position, explain the available options and help you claim the relief you’re entitled to.
If your company has made a loss, or you have unused losses from previous years, the Perrigo team is here to help.
Give us a call on 01229 488860, book a discovery call, or join us at our next Drop-In Session to speak with the team in person.
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