Tax Tip – Covid Loss Carryback

The COVID-19 pandemic saw a huge change on the way people could and did work, and many businesses felt the pinch. To help those who suffered losses as a result of the pandemic, the government have allowed, for a limited period, for losses to be carried back for three years – rather than just one. This carry back is available to individuals, unincorporated businesses, and companies for 2020/21 and 2021/22.

For those that have decided to cease trading, there are some reliefs available for losses on cessation, for example – a claim for terminal loss relief could be made if the business ceases to trade (permanently) and makes a terminal loss. This loss may be relieved against the profits of trade for the final tax year, and the previous three tax years; or it could be set against total income (extending to Capital Gains) for the year of the loss and / or the year before.

If you’ve struggled with financial losses or are thinking of ceasing trade – but aren’t sure what reliefs apply to you, or how to make the correct claims for them, you should get in touch with our team today. Our experts can provide advice and assistance to help you get it right.