New loss relief claims now allowed

Companies can now claim the new extended loss relief announced in Budget 2021. However, special claim procedures can apply. If you intend making a claim what do you need to know?

Finance Bill made law. This year’s Finance Bill received Royal Assent on 10 June 2021 and is now on the statute books as Finance Act 2021. This is significant for some companies who want to claim the new extended loss relief announced in Budget 2021.

Claims now allowed. Until 10 June if you wanted to claim the extended loss relief it had to be done via your company’s self-assessment corporation tax return. This delayed your claim until you were in a position to submit your company’s return. This is still the case for claims for extended loss relief unless they are for £200,000 or less. In those cases, since 10 June, a standalone or group company with losses capable of providing relief up to a maximum of £200,000 may make a claim in respect of a relevant accounting period without having to wait to submit its company tax return.

Information required. HMRC says that the information it will require for a claim made outside a return must include the following details:

  • The company’s name and tax reference

  • The accounting period during which the loss was incurred

  • Evidence of the loss in the form of draft or management accounts

  • The amount of the loss and the accounting periods it is to be claimed for

  • The bank account name, number, etc. that any refund is to be paid to.

More delay? Frustratingly, HMRC says it will give an update shortly on how it would prefer to receive claims, e.g. in writing, email or other means, so it can process them quickly. We’ll bring you this information when it’s available. In the meantime if you send a claim in writing we recommend that at the head of your letter you mark it “EXTENDED LOSS RELIEF CLAIM”.

Claims for the extended loss relief which exceed £200,000 must be made in a corporation tax return. Smaller claims can be made before filing a tax return but must include draft accounts and details of how the loss is to be relieved.

Kelly AnsteeTaxswag