If a limited company in England and Wales makes an operating loss one year after making an operating profit in previous years, what happens about corporation tax? Is it possible to claim back corporation tax based on the loss made?

The answer is quite simple. If a company has made a loss, it can carry this back to the previous year provided that the previous year was a profit-making one. By doing this it is possible to reclaim some or all of the corporation tax paid on that year’s profit.

If there are no profits to go back to, the company would have to carry the loss forward.

If the year of loss was the companies final year of trading you could go back three years.

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