Company made a loss? Your CT600 still needs a loss schedule

In short: A loss does not cancel a notice to deliver a Company Tax Return: the company must still file, even with no Corporation Tax to pay (GOV.UK: Company Tax Returns). The return should show the tax trading loss and what happens to it. A trading loss can be set against the same period's profits, carried back against the previous 12 months' profits with a claim made within 2 years of the end of the loss-making period, or carried forward (Corporation Tax Act 2010, section 37; GOV.UK: Work out and claim relief from Corporation Tax trading losses).

The useful next step is to establish the tax loss and document what happens to it, not submit a return full of zeros.

This guide concerns an ordinary trading company. Property losses, capital losses and losses when a trade ends need their own treatment.

Is an accounts loss the same as a tax loss?

Not automatically: an accounts loss can differ from a tax trading loss, because the tax calculation starts with the accounts result and makes the relevant adjustments. A negative bank movement is neither of those figures: borrowing, asset purchases and repayments can change cash without representing a trading loss. HMRC explains the accounts-to-tax adjustment requirement in its trading-loss guidance.

Bring the preparer the final accounts, tax computation, asset schedule and prior loss records. If the accounts are still changing, label the loss calculation provisional.

What can a company do with a trading loss?

Relief for an eligible trading loss may come from the current period, a carry-back, generally to the preceding 12 months, or future profits, depending on the company's facts. The usual deadline for a carry-back claim is two years after the loss-making accounting period ends. Your working papers should answer three different questions:

Ordinary carry-back generally looks at the preceding 12 months, with conditions including continuation of the same trade. Do not substitute old temporary pandemic rules or terminal-loss rules for an ordinary claim. HMRC: trading-loss relief.

Whether a claim is available, and whether it is sensible, depends on the company's facts. A headline "tax refund" is not enough to choose the route.

What does a loss schedule look like?

A loss schedule tracks unused opening losses, the loss arising, amounts used or claimed and the unused balance: in the example below, a £9,000 loss with a £6,000 carry-back leaves £3,000 unused. Keep the full loss arising visible alongside the amounts used, because recording only the net figure conceals the claim history.

Assume a qualified preparer has confirmed these figures and claims for one eligible trading-loss category. This example checks the arithmetic only; it does not establish relief entitlement or a refund.

The control is 0 + 9,000 - 0 - 6,000 = 3,000.

Do not turn the £6,000 into an estimated refund by automatically multiplying it by today's tax rate. The earlier period's computation must be reconsidered using its applicable facts and rules.

How do you record a trading loss on the CT600, step by step?

Establish the tax loss from the accounts, decide with your preparer how it is used, record every movement in a loss schedule, match each use to its claim, check your software supports the route, then check the schedule reconciles. These steps cover an ordinary trading loss; property, capital and terminal losses need their own treatment.

Step 1: Gather the records the loss comes from

Bring the preparer the final accounts, tax computation, asset schedule and prior loss records. If the accounts are still changing, label the loss calculation provisional. Do not start from the bank: a negative bank movement is neither an accounts loss nor a tax loss, because borrowing, asset purchases and repayments can change cash without representing a trading loss.

Step 2: Work out the tax trading loss

Start with the accounts result and make the relevant tax adjustments: an accounts loss is not automatically the same as a tax trading loss. HMRC explains the accounts-to-tax adjustment in its trading-loss guidance. The computation should reconcile the accounts result to the tax result, so anyone can see how the loss figure was reached.

Step 3: Decide how the loss will be used

Relief for an eligible trading loss may come from the current period, a carry-back, generally to the preceding 12 months, or future profits, depending on the company's facts. Ordinary carry-back has conditions, including continuation of the same trade, and the usual claim deadline is two years after the loss-making period ends. Unclear opening losses, several trades, ownership changes or a group relationship are reasons to seek specialist review first.

Step 4: Record every movement in the loss schedule

Record the unused opening losses, the tax trading loss arising, the amount used against current-period profits, any valid carry-back claim and the unused balance. Keep the full loss arising visible alongside the amount used: recording only the net figure conceals the claim history. Do not turn a carry-back into an estimated refund by multiplying it by today's tax rate.

Step 5: Match each use to its claim

Check that each amount used has a corresponding claim reference or calculation. A separate claim and a return entry must describe the same use, not accidentally request relief twice. Keep copies of the earlier return if carry-back is involved, and record who will update the loss schedule after any amendment.

Step 6: Check your software supports the loss treatment

A general CT600 editor may not support every relief or repayment route: Taxley calculates a 12-month trading loss carry-back, but not a terminal loss claim or a carry-back from a period of account longer than 12 months. Before starting a paid filing, ask Taxley whether your accounting period and proposed loss treatment are supported, describing the workflow you need. If it isn't supported, Taxley can't file it yet.

Step 7: Check the loss schedule reconciles

Confirm the arithmetic: unused opening losses plus the loss arising, less the amounts used and claimed, must equal the unused balance — in the example above, 0 + 9,000 - 0 - 6,000 = 3,000. Then carry that closing balance into the next filing pack and reconcile next year's opening balance to it. The schedule is right when both checks agree, which matters most if you change accountant or filing software.

Can filing software handle your loss claim?

Not necessarily: a general CT600 editor may not support every relief or repayment route (Taxley calculates a 12-month trading loss carry-back but not a terminal loss claim), so ask Taxley whether your accounting period and proposed loss treatment are supported before starting a paid filing.

Describe the required workflow after obtaining tax advice. For a general first view, take the 30-second check to see whether Taxley fits your company.

Frequently asked questions

What should you check before submitting a return with a loss?

That each amount used has a corresponding claim reference or calculation, that a separate claim and the return entry don't request relief twice, and that next year's opening balance will reconcile to this year's closing balance.

Does a loss mean the company is dormant?

No. A company can be actively trading while spending more than it earns, and a loss does not cancel a notice to deliver a Company Tax Return. Dormancy and profitability answer different questions, so a loss-making company still files its CT600 (HMRC: Company Tax Returns).

Is a loss schedule the same as a claim?

No. A loss schedule is a control record of the losses arising, used and left unused. Any required claim is separate: keep its evidence and treatment on file, and check that each amount used in the schedule has a matching claim reference or calculation.

How long do you have to claim loss carry-back?

The usual claim deadline is two years after the loss-making accounting period ends. Ordinary carry-back generally looks at the preceding 12 months, with conditions including continuation of the same trade, so check eligibility before relying on it (HMRC: trading-loss relief).

Can I work out a carry-back refund using today's tax rate?

No. Do not turn a carry-back into an estimated refund by multiplying it by today's tax rate: the earlier period's computation must be reconsidered using its own facts and rules. In the worked example, the £6,000 carry-back is an amount of loss used, not a refund.

General UK tax information, not advice on a particular company's loss relief. Claims and calculations require qualified review.