Anticipating losses? Claim Corporation Tax Relief for your losses earlier!
If your company is anticipating losses in its current accounting period - due to the impact of COVID - you could claim Corporation Tax Relief for losses earlier.
Losses could be carried back against the previous year to generate a Corporation Tax refund - but how can you release the tax refund earlier to help your cashflow now rather than waiting until after the end of your accounting period?
HMRC recognise the exceptional circumstances of COVID and will allow for a loss claim to be made before the end of your accounting period.
You will need to substantiate an early loss relief claim through profit and loss forecasts, management accounts and a draft Corporation Tax computation. You will also need detailed reasoning behind your assumptions and documentation that confirms the downtown in your sector or industry.
Substantiating your claim becomes much easier as your accounting period progresses and you are relying less and less on estimated figures.
If you think you may be in a position to make an early loss relief claim in respect of your current accounting period or would like help assessing your position and submitting a claim - our Business Services team can help.
Digital Accounting made easy with Xero
Many of our clients (including ourselves) use Xero accounting software to manage their accounting needs. Xero gives real time accounts information - and their reports can be used to generate some of the documentation needed to substantiate a loss claim.
If you are interested in using Xero software (with professional accountant support), please do get in touch.