Tax Tip Week 18 - Carry Back Losses
Professional Contractors and Freelancers who may be struggling financially in the economic crisis may find comfort in the Governments legislation on company losses.
With effect from 22nd April 2009, a company who expects to be making a loss that has an accounting year end between 24th November 2009 and 23rd November 2010; can put in a claim to carry back losses against previous profits resulting in a much need cash injection of rebated corporation tax.
Companies that have profit in the previous three years can now apply to offset a maximum of £50,000 for each of the 2nd and 3rd years and an uncapped amount for the 1st year (most recent year).
Where a company does not have previous year's profits to carry back losses against, it will still be able to carry them forward against future year's profits.
For full details and an example please see the article Carry Back Losses in our Knowledgebase.