Loss Carryback and Carryforward

Loss carrybacks and carryforwards are tax benefits for loss-making companies that enable them to claim tax refunds on prior profit-making years or set losses off against future profits. In the UK, as of August 2021, the Corporation Tax Act allows companies making trading losses in an accounting period to set off the loss against total profits in the same accounting period. They can also set off the unused balance of losses against total profits of the preceding 12-month period. Alternatively, a trading loss can be carried forward and set against trading profits or total profits of subsequent accounting periods (with some conditions and restrictions).