Carry back a trading loss for a Corporation Tax refund: how to claim

In short: Yes. A company can set a trading loss against its total profits of the 12 months before the loss-making period, after first using it against that period's own profits, and HMRC repays the earlier tax the loss covers. Claim it on the loss period's Company Tax Return (CT600) within 2 years, ticking box 45 (GOV.UK: claiming a trading loss carry-back). Taxley prepares and files that return for £49.95 with micro-entity accounts, working out a 12-month carry-back and ticking box 45, then files the accounts at Companies House once the return is paid and finished.

Take the 30-second check to see whether Taxley fits your company, or see what a return costs.

Key facts (checked on 4 October 2026)

Can a company carry back a trading loss to get Corporation Tax back?

Yes, if the trade made a loss and the company carried on the same trade in the 12 months before the loss period. Section 37 of the Corporation Tax Act 2010 sets the loss against the loss period's total profits first, then, if the claim asks for it, against profits of the previous 12 months (CTA 2010 s.37).

The 12 months are counted back from the day the loss period begins, not by accounting period. GOV.UK's example sets an £8,000 loss of the year to 31 December 2016 against £20,000 of profits of the year before, reducing them to £12,000 (GOV.UK: Carry a trading loss back). An earlier accounting period only partly inside the 12 months has its profits apportioned, and the loss reaches only the part inside. The relief is against total profits, so it covers interest, rent and gains as well as trading profits. Carrying back is optional, and a company can carry the whole loss forward instead. Once it claims a carry-back, though, HMRC's manual says the loss must first cover the loss period's own profits, then as much as possible of the previous 12 months' profits (HMRC manual CTM04505).

What conditions must a 12-month loss carry-back meet?

Four conditions matter for most small companies. The loss must be a trading loss, the trade can't be carried on wholly outside the UK, the company must have carried on the same trade in each earlier period it relieves, and the claim must be made within 2 years after the loss period ends, unless HMRC allows longer (CTA 2010 s.37).

The same-trade test applies period by period: HMRC's manual says the company must have carried on the loss-making trade at some time in each earlier period, and later periods are relieved before earlier ones (HMRC manual CTM04510). The time limit runs from the end of the loss period, so a loss of the year to 31 March 2026 can be claimed up to 31 March 2028. The claim can't be made early either. HMRC's manual says no loss has crystallised until the accounting period ends, so a company can't anticipate a loss to get a repayment, except in exceptional cases backed by full evidence (HMRC manual CTM92090). Relief is also refused unless, in the loss period, the trade is run on a commercial basis with a view to profit (CTA 2010 s.44).

Two rules reach further back and are separate claims, not covered by this guide. Terminal loss relief lets a company that stops trading carry losses of its final 12 months back against profits of the 3 years before (GOV.UK: Terminal losses). A temporary rule in Finance Act 2021 allowed 3 years for losses of accounting periods ending from 1 April 2020 to 31 March 2022, with the extra 2 years capped at £2,000,000 of losses for periods ending in each of those years (HMRC manual CTM04510). A non-trading loan relationship deficit, shown in box 795 rather than box 780, has its own 12-month carry-back, against non-trading profits from loan relationships and derivatives only (HMRC manual CFM32070).

Which CT600 boxes does a loss carry-back use?

Box 45 is the carry-back flag. On the loss period's return, box 780 shows the whole trading loss, box 275 shows the part set against that period's own profits, and box 45 is ticked because the claim reduces an earlier period's Corporation Tax (HMRC: The Company Tax Return guide).

GOV.UK's loss guidance sets out the entries: 0 in box 155, the full loss in box 780, and as much of the loss as can be claimed against total profits in box 275 (GOV.UK: How to claim a trading loss). The amount carried back has no box of its own on that return. The computation states it instead, giving the company's name, the period of the loss, the amount and how the loss is used. HMRC asks for bank details in boxes 920 to 940 on every return (HMRC: Overpayments and repayments). Box 280 belongs to an amended earlier return that includes the carried-back loss in its box 275, and HMRC says that can't be made until the loss period's return has been delivered (HMRC: box 280).

How much Corporation Tax does a loss carry-back repay?

The repayment is the earlier period's tax before the claim less its tax after it, worked out at that period's own rates. In the example below, carrying £30,000 back against £40,000 of profits taxed at the 19% small profits rate cuts that year's bill from £7,600 to £1,900, a repayment of £5,700 (GOV.UK: Corporation Tax rates).

Worked example. Harbour Lane Design Ltd, a fictional company, has 12-month accounting periods ending on 31 March, no associated companies and no dividends received, and carried on the same trade throughout. In the year to 31 March 2025 it made taxable profits of £40,000 and paid £7,600 of Corporation Tax on 1 January 2026, its due date 9 months and 1 day after the year end (GOV.UK: Pay your Corporation Tax bill). In the year to 31 March 2026 its trade lost £32,000, and it earned £2,000 of bank interest.

The order is the one the law sets. First, £2,000 of the £32,000 loss covers the interest in its own year, leaving £30,000. That £30,000 goes against the year to 31 March 2025, cutting £40,000 of profits to £10,000. Tax falls from £7,600 (19% × £40,000) to £1,900 (19% × £10,000), so £5,700 comes back and no loss is left to carry forward. The year to 31 March 2025 lies wholly within the 12 months before the loss year began on 1 April 2025, so HMRC's manual says repayment interest runs from its normal due date, 1 January 2026 (HMRC manual CTM92360). The claim deadline is 31 March 2028, and the loss year's return is due by 31 March 2027, 12 months after the year ends (GOV.UK: Company Tax Returns).

Why isn't the refund always 19% of the loss?

Because the repayment depends on the earlier period's own rates and limits. For profits from 1 April 2023, multiplying the loss by 19% is right only while that period's profits stay within the £50,000 small profits limit before and after the claim. In the marginal relief band, each £1 of loss carried back saves 26.5p, and above the band 25p.

Each row assumes a 12-month year starting on or after 1 April 2023, with no associated companies and no dividends received. At £90,000, marginal relief applies: tax is 25% of profits less 3/200 of the gap between the profits and the £250,000 upper limit (HMRC manual CTM03910; CTA 2010 s.18B). That gives £22,500 − £2,400 = £20,100 before the claim and £15,000 − £2,850 = £12,150 after it, a repayment of £7,950, or 26.5% of the loss, so a 19% estimate would be £2,250 short. At £300,000 the profits stay above £250,000 after the claim, so the 25% main rate applies throughout. The limits shrink for a short period and are shared with associated companies (GOV.UK: Marginal Relief for Corporation Tax).

How do you claim a loss carry-back on the CT600?

Work out the tax loss, set it against the loss period's own profits, then against the previous 12 months, most recent period first, and make the claim on the loss period's return with box 45 ticked and bank details given. Six steps cover it, and the last one checks the time limit and that the loss adds up.

Step 1: Work out the trading loss for tax

Start from the accounts loss and make the tax adjustments: GOV.UK says capital allowances increase a trading loss and balancing charges reduce it (GOV.UK: Trading losses). Enter the result in box 780 in full, with 0 in box 155. With more than one trade, keep each trade's loss separate, because HMRC asks the computation to identify the loss-making trade.

Step 2: Set the loss against this period's other profits

Set the loss against the loss period's own total profits first, such as bank interest, rent or gains, because a company can't carry a loss back without doing that (HMRC manual CTM04505). Enter that amount in box 275, or leave it empty if there are no other profits. Whatever is left is the most the claim can carry back.

Step 3: Collect the earlier periods' figures

List every accounting period falling wholly or partly in the 12 months before the loss period began, with its dates and profits from its CT600. Check the company carried on the same trade in each, because a period without it takes none of the loss (CTA 2010 s.37(6)). Note any losses of other periods already carried back there, because an earlier loss is relieved first.

Step 4: Set the loss against the most recent period first

Set the remaining loss against the latest earlier period first, then the one before it (HMRC manual CTM04510). A period only partly inside the 12 months takes at most its time-apportioned share of profits. Use as much as each period's profits allow, then work out each earlier period's tax again at its own rates: the difference from the tax charged is the repayment.

Step 5: Make the claim on the loss period's return

Tick box 45 on the loss period's CT600 and state the claim in the computation: the company's name, the loss period, the amount and how it is used, meaning each earlier period and the amount set against it. Give bank details in boxes 920 to 940. Don't also send an amended earlier return or a letter for the same loss, which HMRC says may slow the repayment (HMRC: Corporation Tax general enquiries).

Step 6: Check the time limit and that the loss adds up

Confirm the claim is made within 2 years after the loss period ends (CTA 2010 s.37(7)). Then check the loss adds up: for a company outside a group, box 780 equals box 275 plus the amount carried back plus any loss carried forward, as in the example's £32,000 = £2,000 + £30,000 + £0. Keep the working, because HMRC can ask about the use of a loss in a later return.

When does HMRC repay a carried-back loss, and does it add interest?

HMRC repays the earlier period's tax after setting it against any Corporation Tax still owed (GOV.UK: How to claim a carry-back). For a loss carried back to a period wholly within the previous 12 months, repayment interest runs from that earlier period's due date, or from when its tax was paid if later (HMRC manual CTM92360; GOV.UK: refund interest).

The interest start date depends on where the loss lands. Where the earlier period isn't wholly within the 12 months, interest runs only from the due date of the period in which the loss arose, as it does for a non-trading deficit carried back (HMRC manual CTM92360). GOV.UK says interest HMRC pays on overpaid Corporation Tax is taxable and must be included as income in the Company Tax Return (GOV.UK: Get a refund or interest on your Corporation Tax). Repayments over £100 are made automatically, and smaller ones only when bank details are on the return (HMRC: Overpayments and repayments). Filing the loss period's return soon after the period ends, rather than at the 12-month deadline, brings the repayment forward, and our guide to how long a Corporation Tax repayment takes covers HMRC's timescales.

Can Taxley claim a loss carry-back for you?

Yes, for an ordinary 12-month trading loss carry-back. Taxley (taxley.co.uk), UK online software that prepares and files the Company Tax Return (CT600) with HMRC and the annual accounts with Companies House, works out the claim on the loss period's return, sets the loss against that period's other profits first and ticks box 45.

In the Advanced editor, a section headed "Carry a trading loss back" sits below Tax adjustments for a company with a trade. Tick "Carry this period's trading loss back to the previous 12 months" and confirm the company carried on the same trade, in the UK, in the earlier periods. Taxley can take the earlier profits from its own returns when HMRC has accepted Taxley returns covering the whole 12 months. Otherwise choose "I'll enter the figures from the earlier return" and add each earlier accounting period, up to 12, with its dates, its boxes 235, 300 and 305, any group relief and any losses already carried back to it. Taxley relieves the latest period first, limits a period partly inside the 12 months to its share of profits, and shows the amount set against each period, with an estimated repayment where it knows that period's tax details. HMRC works out the actual repayment.

Taxley files the claim on the loss period's return and nothing for the earlier period, which HMRC adjusts itself. Add bank details in the return's "Repayment bank details" section. If the 2-year limit has passed, Taxley carries the loss forward instead and still lets you file. It doesn't file terminal loss claims, the temporary 3-year carry-back or a carry-back from a period of account longer than 12 months; for a terminal loss or a long period it stops before payment, so you aren't charged. The fee is £49.95 with micro-entity accounts or £139 with small-company accounts, including filing the accounts at Companies House once the return is paid and finished. Take the 30-second check to see whether Taxley fits your company, or see the prices.

Frequently asked questions

Can a company carry a loss back if last year's tax is still unpaid?

Yes, if last year had taxable profits. GOV.UK says that when the company owes Corporation Tax, HMRC deducts the reduction from what is owed before repaying anything (GOV.UK: trading losses). If the earlier year had no profits, nothing can be carried back.

Does last year's Company Tax Return need amending?

No, not when the claim is on the loss year's return. HMRC asks companies waiting for a repayment not to send an amended return once a carry-back claim has been made on the loss-making period, and not to send a duplicate claim in writing (HMRC: Corporation Tax general enquiries).

Can a company carry the loss forward instead of back?

Yes. Carrying back needs a claim, and GOV.UK presents it as an alternative to carrying the loss forward against later profits (GOV.UK: Carry a trading loss back). Our guide to trading losses brought forward explains how the loss is used in later years.

What if the 2-year time limit has passed?

The company can still claim within any further period an HMRC officer allows (CTA 2010 s.37(7)), but that is at HMRC's discretion. Without it, the loss isn't carried back, and an unused trading loss is normally carried forward against later profits instead.

Can a group company surrender the loss instead?

Yes, if it has a qualifying group relationship. GOV.UK says a company in a group can choose to set certain losses, including trading losses, against profits of other group members instead of carrying them forward or back (GOV.UK: Groups and trading losses).

General information, not personalised tax or accounting advice.